What’s the difference between a material and an immaterial breach of contract?

On Behalf of | Feb 13, 2020 | Business Law |

Once a contract is signed, the parties aren’t free to pick and choose which of the terms they want to uphold. Everything in that contract is a requirement, and the failure to meet its terms is considered a breach.

But not all contract breaches are the same. Some breaches are so minor that they’re basically immaterial and not a cause for legal action. Other breaches can be so serious, or material, that they relieve you of your obligations in return or lead to litigation.

What’s the difference? It comes down to whether or not the breach creates a substantial difference between what you expect to receive from the other party compared to what you actually receive.

For example, imagine that you run a party supply store. You contract with a supplier to send you St. Patrick’s Day party supplies by Feb. 1 because you expect to sell them for the upcoming holiday. There’s a delay in shipping, however, and the supplies don’t get to you until Feb. 3. That’s inconvenient, but not likely to cause your business any serious losses.

On the other hand, it’s a different story if the vendor doesn’t get those supplies to you until March 15. That doesn’t give you enough time to sell the party supplies. You certainly shouldn’t have to bear the financial consequences of the vendor’s failure to meet the terms of your contract.

When an important part of a contract has gone unfulfilled, there are legal remedies available. Our office can help you understand your contractual rights, your obligations and your options. Find out more today.