What is the Difference Between a Material Breach of Contract & a Non-Material Breach
A contract creates mutual obligations for both parties who sign the agreement. Each of the parties to the contract is obligated to comply with the terms that the parties negotiated. If either party fails to live up to their part of the deal, this can constitute a breach of contract. The breaching party is responsible for compensating the other party for resulting damages.
When a person or company fails to fulfill contractual obligations, it is important to determine whether a material breach of contract occurred or not. There are important differences between a material breach and a non-material breach and an experienced attorney should be consulted for help in determining what occurred in your particular situation. Brown & Charbonneau, LLP has represented many clients in breach of contract claims. Call today to speak with a knowledgeable Irvine business lawyer who can help with your contract dispute.
Material Breach of Contract vs. Non-Material Breach
A material breach of contract is a failure to perform the essential functions of the contract. The failure on the part of the breaching party goes right to the heart of the agreement and essentially renders the contract useless. The non-breaching party does not get the essential thing he bargained for, whether this is a product or a service.
For example, if two parties enter into a contract and one party promises to design a website for the other party in exchange for payment, a material or a non-material breach could occur. If the website designer never produced any website at all, this would be considered a material breach. The website creation was the essence of the contract and it was not completed. However, if the contract specified that the website was supposed to contain an “About Us” page, among others, and the entire website was created except for that one particular page, this would not likely be considered a material breach. It would instead be considered a non-material breach.
A number of different factors are evaluated when determining whether a material breach of contact occurred, including the damage done to the non-breaching party, whether the non-breaching party can be compensated for the loss, whether the failure to perform is fixable or not, and whether the breaching party acted in bad faith. Ultimately, though, the most important consideration is whether the non-breaching party was deprived of the heart of what they bargained for.
When a material breach of contract occurs, the damages will typically be higher than in situations where the breach was non-material. A material breach also gives the other party the report not to perform their part of the agreement. In the website design situation, for example, the person who contracted for the site would likely have to pay most of the bill if the site was only lacking an “About Us,” page but would not have to pay if no site was designed at all.
Because there are different remedies for a material breach, it is important to talk to a lawyer to determine what has occurred if you are involved in a contract where something has gone wrong. Contact Brown & Charbonneau, LLP today to schedule a consultation with an attorney who can help you.