Penelope agrees to sell 100 pounds of sugar to Vito in June. In May, Penelope discovers there is a major sugar shortage and she would have to pay her supplier 1000 times more than expected. She alerts Vito in May that she does not intend to sell him the sugar. This is an example of:

Anticipatory repudiation.

Explanation:

Penelope's attitude or follow up towards her ordeal above is an example of anticipatory repudiation.

This is also termed an anticipatory breach, is a term in the law of contracts that describes a declaration by the promising party to a contract, that he or she does not intend to live up to his or her obligations under the contract.

It generally is a breach that constitutes material of contracts that discharge the promisee from all the obligations that they are under.

Itoccurs when the promisor indicates before the time for his performance that he is unwilling or unable to carry out of the contract.