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What is a material breach of a contract?

On Behalf of | Jun 16, 2022 | Civil Litigation

Contracts are very important for businesses in Virginia. Companies need these to clearly state what they expect other companies and clients to do for the business. Companies rely on these contracts and expect the other parties to fulfill their obligations under the contract. If the other party does not fulfill their obligations in the time frames stated in the contract, it can cause real problems for the company and cost them money as a result.

When one party violates the terms of the contract, it is called a breach of contract. Some breaches do not have many consequences, but others do have significant consequences. These are called material breaches of contract.

Factors used to determine a material breach of contract

These occur in the following situations:

  • The breach is a major failure to perform an essential element of the contract.
  • Based on several factors such as the language of the contract, expectations of the parties, industry standards and other factors demonstrate that the breach will cause significant harm to the non-breaching party or deprive them of a significant benefit under the contract.
  • The contract itself states that the breach is material.
  • The culmination of many non-material breaches could also be considered a material breach.

As stated above, material breaches are the ones that cause significant harm to the non-breaching party. It is important that the non-breaching party is made whole after the material breach. This can be done in different ways, but the non-breaching party may need to start a breach of contract claim against the breaching party.

There are many ways that companies and people can breach a contract in Virginia. Some breaches are obvious, but others may not be as straight forward. Also, how to make the non-breaching party whole can be accomplished in different ways. Breach of contract lawsuits can be very fact-specific matters and determining the appropriate remedies to the breach can be difficult. Experienced attorneys understand these complicated matters and may be able to guide one through the process.