What does "anticipatory breach" mean in Texas law?

In Texas law, "anticipatory breach" refers to a situation where one party notifies the other party that they will not perform their contractual obligations before the performance is due. This notification can be either explicit, such as a statement of intent not to perform, or implicit, through actions that demonstrate an unwillingness or inability to fulfill the contract.

When anticipatory breach occurs, the non-breaching party does not have to wait until the performance date to take action. Instead, they have the right to either treat the contract as breached and seek remedies immediately or wait until the performance date to see if the breaching party follows through. This concept is crucial because it allows the innocent party to mitigate their damages and make alternative arrangements without waiting for the due date of the contract.

The other choices do not accurately capture the essence of anticipatory breach. For instance, while one party fulfilling its obligations suggests a situation of performance, it does not relate to anticipatory breach. Similarly, a valid excuse for not fulfilling a contract refers to defenses that may arise under different circumstances, and mutual agreement to cancel the contract implies a consensual intention rather than one party's unilateral refusal to perform.