Sarah enters into a contract with Mike to deliver 500 units of a specialized component by August 1st. On July 10th, Sarah notifies Mike that due to supply chain issues, she will be unable to fulfill the entire order by the deadline. Mike decides to cancel the contract and seek another supplier. What type of breach is Sarah committing?
Sarah's notification before the performance date that she cannot fulfill her contractual obligations constitutes anticipatory repudiation. This allows Mike to treat the contract as breached and seek remedies immediately.
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What is anticipatory repudiation?
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How does anticipatory repudiation differ from a material breach?
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What remedies are available if a contract is breached due to anticipatory repudiation?