Do You Still Have to Perform When the Other Party Breaches?
- Yakup Sari, Esq.
- Oct 2
- 6 min read
“Under California law, your duty to perform depends on whether the other party’s breach is material, minor, or anticipatory.”
When a contract goes sideways, one of the first questions clients ask me is: “If the other side isn’t holding up their end of the deal, do I still have to do my part?”
The short answer: It depends on the type of breach. California law doesn’t treat every broken promise the same way. Sometimes you have to keep going; sometimes you’re legally allowed to walk away. Let’s break it down.
The Basics: What Counts as a Breach?
To prove a breach of contract in California, you generally need four things:
A valid contract.
Your performance (or a valid excuse for not performing).
The other side’s failure to perform.
Damages that result from that failure.
But not all breaches are the same. California law draws a line between material breaches (serious ones) and minor breaches (less serious). There’s also something called anticipatory breach, where the other party makes it clear they won’t perform in the future.
Material Breach: When the Deal Falls Apart
Think of a material breach as a deal-breaker. It goes to the very heart of the agreement—so serious that it defeats the whole purpose of the contract. A material breach undermines the agreement’s purpose and entitles the non‑breaching party to treat the contract as discharged. California cases explain that when a party’s failure to perform constitutes a material breach, the other party may be discharged from its duty to perform. Courts consider factors such as the benefit received, the possibility of compensating the injured party with damages, the breaching party’s performance, hardship, and whether the failure was willful
Example: You hire a contractor to build a house, but instead of using the agreed-upon materials and floor plan, they cut major corners. When this happens in California:
You’re usually excused from continuing to perform.
You can cancel the contract (rescission) and sue for damages.
You can suspend performance until the other side fixes things.
If you decide to keep going, you need to clearly reserve your rights in writing—otherwise, courts may say you waived the breach.
Minor Breach: Keep Performing, Sue for Damages
A minor breach is more like a hiccup than a disaster. It’s a small failure that doesn’t destroy the whole deal. In this situation, the non‑breaching party cannot terminate the agreement but may sue for damages.
Example: Your supplier delivers your order a few days late, but you still get what you need, and your business isn’t derailed. In these situations:
You must keep performing under the contract.
You can still sue for damages caused by the delay or defect.
Courts will not let you cancel the entire contract over something small.
California law even has a concept called substantial performance—meaning if the other side did most of what they promised and the mistakes are minor, you’re still bound to perform.
Anticipatory Breach: When the Other Side Says “I Won’t Do It”
What if the other side tells you ahead of time they won’t honor the contract? That’s anticipatory breach. Civil Code § 1440 states that if a party gives notice before the time for performance that they will not perform and fails to retract, the other party is entitled to enforce the obligation without previously performing.
Example: A vendor emails you saying they won’t deliver your order next month. Under California Civil Code § 1440, you don’t have to sit around waiting for them to fail. You can:
Treat it as a breach right away.
Stop performing your part.
Sue for damages immediately.
Key Question: How Do Courts Decide If It’s “Material”?
Under California law, a material failure of consideration “discharges the other party’s duty” to perform. This rule is grounded in California Civil Code § 1439, which provides that before a party can require another to perform, they must fulfil all conditions precedent themselves.
In contrast, a minor breach “does not undermine the overall purpose of the contract”; therefore, the non‑breaching party may not terminate the agreement but may seek damages for losses.
Whether a breach is “material” is usually a fact question. Courts weigh factors like:
Did you still get the main benefit you expected?
Can money damages make up for the failure?
How much of the contract has already been performed?
Was the breach willful or just negligent?
How much hardship would fall on the breaching party?
If the breach goes to the core of the deal, you may be excused from performing. If not, you probably still have to keep up your end.
Don’t Forget: The Duty to Mitigate
Even if the other side breaches, you can’t just sit back and let damages pile up. California law requires you to take reasonable steps to reduce your losses. California Civil Jury Instruction CACI No. 358 explains that a plaintiff is not entitled to recover damages for harm that “could have been avoided with reasonable efforts or expenditures”
Examples: If a tenant leaves early, a landlord has to make reasonable efforts to re-rent the property instead of letting it sit vacant or sellers must attempt to resell goods, or employees wrongfully terminated must seek comparable employment.
If you don’t mitigate, courts may cut down your damages award.
The duty to mitigate does not require taking actions that are unreasonable or impracticable, and whether the injured party acted reasonably is a question of fact. Courts have held that a plaintiff who fails to mitigate cannot recover losses that could have been avoided through ordinary care.
Waiver: Be Careful About Continuing Performance
Here’s a trap many people fall into: if you keep performing after a material breach without reserving your rights, a court might say you waived your right to terminate the contract.
Example: Students who sued their university over tuition increases lost because they continued attending classes and graduated—the court said they accepted the deal despite the breach.
That’s why you should always:
Object in writing and avoid actions inconsistent with rescission.
State clearly that you’re not waiving your rights.
Practical Steps If the Other Side Breaches
Identify the type of breach: minor, material, or anticipatory. Consider whether the breach defeats the purpose of the agreement or can be compensated in damages.
Decide whether to continue or suspend performance (consult with counsel first).
Send notice: many contracts require formal written notice and a chance to cure. Failing to follow notice provisions might jeopardize your rights.
Mitigate damages: take reasonable steps to reduce harm.
Document everything: keep all emails, invoices, and records showing performance, breach, and mitigation efforts. These documents are significant if litigation ensues.
Talk to a lawyer early: every case is fact-specific, and missteps can cost you rights.
Because each dispute is fact‑specific, parties facing a breach should consult knowledgeable counsel to protect their rights while complying with California law.
At Sari Law Firm, we help clients protect their rights. If you believe someone has breached a contract or failed to meet their obligations, contact us today to schedule a free consultation. Let’s make things right.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Every case is different. If you believe your rights have been violated, consult a qualified California attorney to evaluate your specific situation.
FAQ
1. What happens if the other party breaches first?
If the breach is material, you may be excused from further performance. If minor, you must keep performing but can sue for damages.
2. What is a material breach under California law?
A serious failure that defeats the contract’s purpose — defined in Civil Code §1439. It allows the non-breaching party to terminate and seek damages.
3. What is an anticipatory breach?
When a party clearly states they won’t perform in the future (Civil Code §1440). You can treat it as an immediate breach and take legal action.
4. Do I still have to mitigate damages?
Yes. California law (CACI 358) requires reasonable steps to minimize losses after a breach — like re-renting property or finding replacement suppliers.
5. What happens if I keep performing after a breach?
If you continue without reserving rights, the court may see it as waiver. Always object in writing and clarify that you’re not waiving claims.
6. How can Sari Law Firm help?
We assess your breach situation, determine whether continued performance is required, and pursue compensation for your losses under California law.
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