A contract is a written or spoken promise, or series of promises, between two parties. Each party to a contract promises to perform a certain duty or pay a certain amount. The agreement is meant to be legally enforceable, so that each party will have legal recourse if the agreement isn’t kept.
A breach of contract occurs when the agreement is not kept, because one party to the contract does not fulfill their obligation according to its terms.
A breach can occur if a party fails to perform within the time frame specified in the contract, does not perform in accordance with the terms of the agreement, or fails to perform whatsoever.
If one party fails to perform while the other party fulfills her duties under the contract, the performing party is entitled to legal remedies for breach of contract.
While the general rule of contract law applies, it’s important to keep in mind that many contracts will have a provision as to what should be done in the event of a breach (including minor and material breaches).
A contract breach can be minor, material, fundamental or anticipatory. Here, we will focus on minor v. material breaches.
A minor breach occurs when one party “substantially performs,” or meets the essential obligations of the contract, but does not meet a condition that is minor and does not affect the contract terms significantly. This is also known as a partial breach.
A material breach is a substantial breach in contract terms usually excusing the non-breaching party from performing and giving her the right to sue for damages. For example, in a home purchase contract, a seller refusing to give the buyer the keys to the home after the buyer has completed all contract terms is a material breach.
The main difference between a minor breach and a material breach is the severity of the breach of the contract. A material breach is much more serious and makes completing the contract difficult or impossible.
Conversely, a minor breach is insignificant enough that the rest of the contract can be completed to a generally satisfactory result.
The non-breaching party can sue for damages caused by the minor breach. However, the minor breach does not excuse either party from further performance.
In other words, in the event of the minor breach, both the breaching party and the non-breaching party must continue to fulfill the rest of the contract. If either party refuses to continue their part of the contract, then that party can be held liable for a material breach.
Both parties should look to their contract to determine what steps should be taken. Does the breaching party have any specific obligations?
Once one party commits a material breach, the non-breaching party can refuse to perform, and can sue either to compel the breaching party’s performance, or for any damages caused by the breaching party.
If a material breach occurs, make sure that you document the exact nature of the breach and check that it is a violation of the contract. From there, find out what the contract says to do in the event of a material breach.
Most contracts will clarify and lay out what to do in the event of a material breach, in order to minimize the harm that can be felt by both parties.
To determine whether a breach was material or minor, contact a local business lawyer. The lawyer will explain the type of breach, your remedies, and how to proceed with resolving the contract dispute.
Last Modified: 06-22-2018 02:56 PM PDTLaw Library Disclaimer
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