An anticipatory breach (also called constructive breach) occurs when a party to a contract either expresses or clearly implies an intention not to perform the contract even before being required to act. The repudiation must be clear and absolute. It must also indicate a deliberate and complete refusal to perform according to the terms of the contract. Injured parties may seek damages by showing that by relying on the contract.
Damages describe money awarded to parties who have been victimized or have suffered injury to their legal rights by others. Damages are of different kinds, and the nature of a claim usually determines what type of damages will apply.
A sum of money equal to the real financial loss suffered by the injured party defines actual damages. Since they are intended to compensate the injured party, actual damages are also called compensatory damages. Thus, damages awarded for nondelivery of promised goods or services would be an amount equal to the difference between the price stated in the contract and what the promisee would have to pay elsewhere.
Incidental damages and consequential damages are awarded for losses indirectly, but closely, attributable to a breach. Incidental damages cover any expenses paid out by the innocent party to prevent further loss. Consequential damages result indirectly from the breach because of special circumstances that exist with a particular contract. To recover consequential damages, the injured party must show that such losses were foreseeable when the contract was first made.
Damages awarded in excess of actual, incidental, or inconsequential damages where it is shown that the wrongful party acted with malicious intent and willful disregard for the rights of the injured party are punitive damages, also called exemplary damages.
Token damages awarded to parties who have experienced an injury to their legal rights but no actual loss are nominal damages. In today's practice, the award is usually one dollar.
Speculative damages are computed on losses that have not actually been suffered and that cannot be proved; they are damages based entirely on an expectation of losses that might be suffered from a breach. They differ from future damages in that speculative damages are not founded on fact but only on hope or expectation.
A decree of specific performance is a court order calling for the breaching party to do what he or she promised to do under the original contract of the unique subject matter.
