What Makes A Breach Of Contract Be Considered "Material?"

Posted on: 2 August 2017

A material breach of contract occurs when a party to a contract violates the contract in a major way that defeats the purpose of a contract. A material breach contrasts with a non-material breach in which the violation is minor and the contract can still be salvaged. Here are the things you can use to prove a material breach:

The Breaching Party's Actions Are Unreliable

You can also use the breaching party's actions from the time the contract was signed to the time you suspected a breach to prove that it is material. If their actions seem unreliable, then it will be difficult to try and salvage the situation.

Take an example where you have entered into a contract with a manufacturer to supply your auto shop with car parts. A short while after signing the contract, you learn that the manufacturer doesn't have the capacity to supply the required volume of parts you need. Then you learn that they don't even have the financial strength to outsource the production. On top of all these the manufacturer is hiding the difficulties from you, despite the fact that they don't have a solution for them. Prove all these in court and you will be on your way to proving your material breach of contract.

There Is No Fast or Easy Solution to the Breach

As explained in the introduction, a material breach is a major occurrence that makes it impossible or next to impossible to meet the terms of the contract. This means there is no quick solution that can get the contract back to track. Maybe the maturity of the contract is also just a few days away.

Consider an example where you ordered for a ton of tangerine from a farmer, and the farmer fails to preserve the fruits as required and delivers rotten tangerines. If the farmer doesn't have any other tangerines to replace the rotten ones, then the breach is material since there is no way they can quickly replace the fruits or make them ripe again. Contrast this with a non-material breach where the delivered fruits are rotten, but the farmer has other tangerines that they can load and transport to replace the rotten ones.

A breach of contract is recoverable as long as you can prove your case and damages. These cases tend to be pretty complicated, so consult a lawyer before taking any measures. In the meantime, continue meeting your contract obligations so that you aren't later deemed to have contributed to the breach.