Proud Neighbors In Cincinnati

Proud Neighbors In Cincinnati

Material vs. immaterial breach of contract

On Behalf of | Mar 15, 2022 | Business Law |

Contracts are valuable tools in any business relationship. They define the expectations and set the rules of engagement between the parties.

If the other party fails to meet their obligations under the terms of the contract, you can sue them and find relief for their breach of contract. However, it depends on the nature of the breach.

What’s the extent of the breach?

Usually, there are two types of breach of contract: material and immaterial. The main difference is the extent of the breach and how much it affects the fulfillment of the contract.

A material breach of contract defeats the purpose of the contract since it constitutes a serious violation of the terms agreed upon. For instance, if you contracted a party to deliver fireworks in anticipation of Independence Day celebrations on July 4th, but they end up making the delivery a month later, that is a material breach of contract since the fireworks cannot be used for their intended purpose.

On the other hand, an immaterial breach is minor and only slightly inconveniences the non-breaching party. For example, in the above scenario, if the fireworks were to be delivered on June 1st but the supplier delayed by a day, it may be considered an immaterial breach since it affords you enough time to go ahead with your preparations.

Protecting your business interests

Sometimes, there is a fine line between a material and immaterial breach of contract. Either case could hurt your business, which is why you need to be aware of the steps to take and the damages available for you, depending on the impact of the breach.

Most importantly, you need to safeguard the interests of your business at all times by ensuring that you anticipate such situations and ensure you come out on top at the end of it all.