Material Breach of Contract vs. Non-Material Breach
Individuals or businesses who sign a contract are expected to follow the terms of their agreement. Regardless of whether you actually read or understood the contract that you signed, you are usually required to fulfill your obligations under it or you could face a breach of contract case. Unfortunately, in some situations, one or both parties to a contract fails to live up to the promises that were made when the contract was negotiated and signed.
A failure to fulfill the terms of a contract is considered a breach, and the non-breaching party may pursue legal remedies. There are different types of breaches including a material breach of contract and a non-material breach of contract. The implications of each type of breach will vary and it is important to understand your legal rights and your legal options when a contract you are party to suffers from a failure of performance. A Las Vegas, NV contract lawyer at Pintar Albiston LLP can help you in the event that a breach occurred. Call today to schedule a consultation with a lawyer who can evaluate your case and provide you with the representation you need to take action.
What is a Material Breach of Contract?
A material breach of contract occurs when the breaching party fails to perform in a way that goes directly to the heart of the contract. The failure to perform undermines the entire purpose of the agreement and leaves the non-breaching party without the services or goods that he bargained for. The breach is generally one that is not easily fixable or remediable. A non-material breach of contract, on the other hand, is a more minor failure to perform on the part of the breaching party.
Consider, for example, a contract to purchase a vehicle. One party promises to sell the other party a functional and operational car with all of its factory-supplied parts and the other party promises to pay for that car. A material breach would occur if the seller did not provide the car at all, or if the seller provided a shell of a car that was missing the transmission, engine and steering wheel. In this situation, the purchaser of the vehicle would not get the heart of what he bargained for: a functional car with its parts. A non-material breach, on the other hand, could occur if the car was sold without its radio and floor mats. The purchaser is still damaged because he did not get all of the factory-supplied parts. However, the damage is limited since he still gets most of what he bargained for.
In situations where a material breach of contract occurs, the damages are typically going to be much greater in a breach of contract case. The non-breaching party also has the right to repudiate the contract and decline to perform his part of the bargain when a material breach occurs. For example, if the car was missing all its parts, the buyer would not have to pay. If the breach is non-material, on the other hand, the non-breaching party may still need to fulfill his own obligation but then simply seek compensation for damages. For example, the buyer would have to pay for the car but could pursue a claim for the value of the radio and floor mats.