What Is a Material Breach of Contract?

Photo of a man destroying a contractIn business law, a material breach of contract occurs when the terms of the contracts are violated so badly that the contract itself is voided. This violation, sometimes called a total breach, will have struck at the very foundation of the contract itself, defeating the purpose of having made the contract at all.

These types of violations can be extremely damaging and often result in deteriorated partnerships and businesses. After one party has committed a material breach, the other may choose to end the contract and sue for damages caused by the breach.

“The Heart” of the Deal

In order for you to end the agreement on the basis of a material breach, the other party will have to have committed a violation of the very “heart” of the deal. For example, if you enter a written agreement to buy a local restaurant, but the owner who agreed to sell it to you sells it to another party before you, then you could have a case for material breach.

However, if you are buying a restaurant from another owner and part of the contract is that the appliances stay, but the other owner hands over the keys and you find that the appliances are no longer there, that probably wouldn’t constitute as a material breach.

You can of course demand that the previous owner honors the agreement and either produces the appliances or provides compensation.

Bad Faith Breach

In some cases, a material breach of contract could simply be a misunderstanding or an accident, but in others, it may be a willful act. In bad faith breaches, courts are much more likely to say there was a material breach and rule in favor of the other party.

Ready, Willing, and Able

In order to prove a material breach, you must show that you were ready, willing, and able to perform your side of the contract. If you sue for total breach, and cannot show that you were ready to uphold your end, then the court may deny your claims.

Garland & Mason, L.L.C. is dedicated to helping business owners in Monmouth County deal with a variety of employment law or other business litigation situations.


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