Material Breach of Contract

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What Is a Breach of Contract?

A breach of contract occurs when one party fails to perform their duties as specified in a contract. A contract may be breached by one or both parties. A breach of contract can result in legal consequences for the breaching party. A breach may either be material or non-material depending on the nature of the breach. 

Material vs. Non-material Contract Breach

A material breach is a breach that reaches to the heart of the contract’s subject matter and negatively affects the outcome of the agreement. The essential requirement for a material breach is that the non-breaching party did not receive the “substantial benefit” of the bargain.

A material or “major” breach usually has the effect of defeating the parties’ intentions in the contract. If the breach seems unfair or has gone beyond the terms of the contract, it is usually a material breach. 

In contrast, a non-material or “minor” breach is a failure to perform a duty that only involves minor details which do not affect the whole outcome of the contract. It usually considered to be less serious than a material breach and is often unrelated to the subject matter of the agreement. 

What Is an Example of a Material Breach?

An example of a material breach might be in an electrical contract, where an owner of the home has contracted to pay an electrician to install high-grade wires for safety purposes. Instead, the electrician installs low-quality wires which do not work as well and cause damage to the walls. This would be considered a material breach since the intent of the contract (safety) has been disregarded. 

What Is an Example of a Non-Material Breach?

An example of a non-material breach might be if the home owner contracts for black colored wires but the plumber installs red colored wires, which perform just as well and are not visible after installation as they are sealed behind the wall. This would be considered a breach, but would be non-material because the overall outcome of the contract is the same.   

What Are the Legal Consequences of Material and Non-material Contract Breaches?

In a material breach, the non-breaching party:

With a non-material breach, the non-breaching party:
 

Do I Need a Lawyer for a Breach of Contract Issue?

Regardless of whether the breach is considered to be material or non-material, it is in your best interests to seek the advice of a business lawyer. Material breaches will usually give rise to a viable cause of action in a court of law. Non-material breaches are also important because there may be damages involved that need to be remedied in court. An experienced lawyer can provide much guidance in presenting your arguments or defenses.

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Last Modified: 12-18-2014 03:26 PM PST

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