Material Breach of Contract
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One of the four main types of contract breaches under modern contract law
is known as a material breach. A material
breach of contract involves an issue that is large enough to render the original agreement
“irreparably broken,” thereby defeating the purpose of forming
the contract in the first place. These breaches, also referred to as “total”
breaches, go to the very root of the agreement between the parties and
are noticeable enough to cause actual monetary damages and undue hardship.
If you have entered into a contract with another party and you believe
the other party violated the contract’s terms, a skilled Atlanta
contract attorney from Buckley Beal can represent your interests and help
you pursue a fair legal remedy for your losses.
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Elements of a Material Breach of Contract
Determining whether or not a material breach occurred involves reviewing
prior court decisions from similar contract disputes and consulting with
a well-known legal treatise titled “The Restatement (Second) of
the Law of Contracts.” The following factors generally dictate whether
or not there was a material breach.
1. Was the other party deprived of “the heart” of what it bargained for? – For example, say a person were to purchase a brand new car from
a dealership under the promise from the dealer that their vehicle would
have tinted windows. Instead, the customer is delivered a stock vehicle.
Since the primary purpose of the transaction was to buy a car, this would
likely not be considered a material breach. On the other hand, say for
example a guitar collector were to purchase at auction the very first
guitar ever owned by Jimi Hendrix, but was later presented with a different
guitar. In this case, the deal was not about just purchasing a guitar;
it was about one particular guitar of historical value.
2. Can the other party be compensated? – If the issue can be easily fixed with a reasonable effort or expense
while still keeping the terms of the contract intact, it is probably not
a material breach. For example, since the car dealer in the previous example
could easily have tint installed after the fact, this likely is not a
material breach and is not a satisfactory reason to terminate the contract.
3. What will the breaching party lose? – If the breaching party has already fulfilled a majority of their
contractual obligations when the breach occurs, there is less likely to
be a material breach. For example, say a person were to be commissioned
to custom remodel a person’s bathroom. If the homeowner claims that
a breach occurs a day before the bathroom is to be completed, the contractor
would lose far more than the homeowner would than if the breach was made
known prior to the beginning of the project. The closer a breaching party
is to fulfilling their duties, the less likely a material breach has occurred.
4. Is the breaching party likely to make things right? – If a breaching party is highly likely and able to fix the issue,
it is unlikely that a material breach has occurred. If the breaching party
is financially weak or otherwise unable to correct the problem, however,
a material breach may have occurred.
5. Did the breaching party act in bad faith? – Courts are far more likely to deem a breach a material breach if
it resulted from willful noncompliance or dishonest conduct. Conversely,
breaches resulting from carelessness or other factors beyond the party’s
influence are less likely to be deemed material breaches.
6. Is the non-breaching party “ready, willing, and able” to perform
their duties? – If the contract has not been performed already, the non-breaching
party must be “ready, willing, and able” to perform their
duties as outlined in the contract. If this is not the case, no material
breach has occurred.
7. Does the contract have any specific provisions? – In some cases, a contract will explicitly state within its terms
what conduct is or is not considered a material breach. For example, a
contract can have a clause dictating that failure to make payments in
full and on time constitutes a material breach.
Get a Team of
Super Lawyers® on Your Side
At Buckley Beal, our
Atlanta business attorneys understand the frustrations that can arise when a person fails to fulfill
their promises. If you believe you or your business have been a victim
of a material breach of contract, our firm can walk you step-by-step through
the appropriate legal channels and fight to ensure your rights are upheld
in a court of law. Whether you seek financial compensation or specific
performance from the offending party, we are prepared to go the distance to protect
your wellbeing during this time. Whether you
anticipate a breach or a breach has already occurred, our team works diligently and proactively
to protect your interests.
Schedule an initial consultation today to get started.