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Material vs. immaterial breaches of contract: What to know

On Behalf of | Nov 7, 2022 | Business Litigation |

When you enter into a contract with another individual or entity, you expect them to deliver as per the terms you both agreed and signed against. However, it does not always work out perfectly. The other party might not meet your expectations, and it could cause you losses.

Usually, every term of a contract is legally binding to the parties involved. One cannot pick and choose the contract terms to fulfill or ignore. Otherwise, it may amount to a breach of contract.

Was the purpose of the contract fulfilled?

Not all contract breaches are the same. Some may have far-reaching implications, such as substantial financial losses to the non-breaching party, while others only have minimal effects, financial or otherwise.

A material breach is so significant that it defeats the purpose of the contract. It strikes at the essence of the contract and renders it practically useless since nothing can be done by either party to save the situation. On the other hand, an immaterial breach does not affect the purpose of the contract or its usefulness since it causes little, if any, losses to the non-breaching party.

What are your legal options?

If the other party to a contract fails to meet their contractual obligations, you need to take appropriate action against them. What might seem like a minor inconvenience to them may end up causing you irreparable damage. Fortunately, there are various remedies available for a breach of contract.

Given that every case is different, it is worthwhile to have an assessment of the circumstances of your contract and the breach before taking further action. That way, you will be better placed to make the right decisions to minimize the losses and safeguard your financial interests.