Why it matters whether a breach of contract is material or immaterial

Throughout history, contracts in some form or another have been used to hold parties who agree to do business with one another or exchange certain commodities or services accountable. In modern times, contacts are readily used to outline the responsibilities of and create a legally binding and enforceable agreement between two or more parties. In the world of business, contracts are common and can be extremely complex.

In cases where one or more of the parties that enter into a contact fail to meet or fulfill their contractual terms, legal action may be taken against that individual or entity related to breach of contract. An attorney who handles business litigation matters can assist in helping enforce or defend against breach of contract lawsuits.

In cases where one party accuses another of breach of contract, it must be established whether the breach is material or immaterial. An immaterial breach is one that, while it may have occurred, is considered minor in nature; while a material breach is considered to be a significant deviation from or violation of a contract’s terms.

Factors that may affect whether a breach is considered material or immaterial include the benign or egregious nature of the breach as well as the amount of current or future monetary loss associated with the breach. In cases where a breach is considered to be immaterial in nature, legal action is typically not warranted as it’s unlikely that any damages or compensation will be awarded.

For business owners and officers who believe that a breach of contract is material in nature, it’s important to contact an attorney who can assist in ensuring the contact is enforced or the dispute is otherwise resolved. An attorney will review the contract, determine the nature of the breach and fight for a business owner’s rights to have the matter resolved via mediation or a lawsuit.

Source: FindLaw.com, “Breach of Contract” and Lawsuits,” Sept. 16, 2015