Under anticipatory repudiation, if one party clearly indicates it will not perform when performance is due, the other party may:

• A. Continue to perform and hope the other party changes its mind.
• B. Provide extra time and continue performance.
• C. Sue for damages only after performance is due.
• D. Terminate the contract and sue for damages immediately.

Answer: (D)

Anticipatory repudiation lets the non‑breaching party treat the contract as breached as soon as the other side clearly signals it will not perform when due. When that happens, the non‑breaching party may terminate the contract and sue for damages immediately, rather than waiting to see if performance will occur or hoping the other side changes its mind. This option protects the injured party from ongoing losses and allows recovery for damages caused by the breach. While the party could suspend performance or demand assurances in some cases, the strongest and most straightforward remedy when there is a clear repudiation is to terminate and sue right away for damages.