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How to Determine if a Contract Breach is Material

In contract law, there are different types of contract breaches. The most serious type of breach is called a material breach. A material breach of contract occurs when one party’s failure to abide by a contract’s terms renders it irreparably broken and defeats the purpose of entering the contract in the first place. When one party materially breaches a contract, the other party can file an action in court to collect damages resulting from the breach. In this article, we discuss how to determine if a contract breach is material.  

Was One Party Deprived of What It Bargained For? 

The first thing to examine when trying to determine whether a breach was material is whether one party was deprived of what it bargained for. Making this determination requires a close examination of the facts of the situation. For example, if a party contracted to purchase a truck, and the other party delivered a car, then the first party was clearly deprived of what it bargained for. However, if the truck was delivered but failed to include a minor feature required by the contract, then this is unlikely to be considered a material breach. 

Can the Non-Breaching Party Be Compensated for the Loss?

If a contract breach can be fixed with reasonable effort or expense while keeping the contract in effect, then it is unlikely to be material. Using the example above, if the breaching party can simply install the missing feature to come into compliance with the original contract, then the court is likely to consider the breach to be minor. 

How Much Has the Breaching Party Already Done?

Another factor to consider is how much the breaching party has already done to fulfill its end of the deal. If a breach occurs early in the performance of the contract, then it is more likely to be considered material than a breach that occurs after the breaching party has fulfilled most of its duties under the agreement. 

Did Bad Faith Play a Part in the Breach? 

If one party’s breach was willful or the result of bad faith or unfair dealing, then the court is likely to presume that the breach is material. On the other hand, if the breach is a result of simple negligence or circumstances beyond the breaching party’s control, then the court is likely to consider it a minor breach.  

Is the Non-Breaching Party Willing to Perform?

In order for a breach to be considered material, the non-breaching party must be ready, willing, and able to perform its obligations under the contract.

Does the Contract Address Material Breaches?

Finally, some contracts contain provisions addressing what constitutes a material breach of contract. Rather than relying on the court in the case of a dispute, the parties to an agreement can include a clause in the contract outlining what will be considered a material breach.

Contact a Georgia Business Litigation Lawyer 

If you need help with a contract issue in Georgia, we are here for you. At Griffin Durham Tanner & Clarkson, our experienced business litigation attorneys have years of experience helping people resolve their contract disputes. When you come to us for assistance, our experienced Georgia business litigation attorneys will do everything in our power to ensure that your contract dispute has a successful result. Please contact us to schedule a free consultation with one of our knowledgeable and experienced attorneys.