Material Breach of Contract Definition

Meeting the Material Breach Definition is Essential to Winning Your Case

The material breach of contract definition is one that goes directly to the crust of the agreement. When there is a dispute, and you are bringing a claim, then is the time to claim that the alleged breach was material to the agreement. Not all breaches may be actionable.  

When assessing a material breach of contract vs a nonmaterial breach of contract case, you must first look at the contract and decide whether the dispute was actually addressed in the four corners of the document and is enforceable by law. Also, look to assess the meeting of the minds of the parties at the formation stage.

Having the proper terms in the contract is but one factor that allows the non-breaching party to compel performance. 

When drafting your contract, you have to decide what performance issues, or other situations, are important parts of the terms and conditions and would be considered a substantial breach.  

During litigation, if your breach allegation is only a minor aspect of the agreement, the court may find that a breach is not warranted. When you specify in the contract what the breach of contract definition means, then the court will enforce those terms. 

Material vs. Non-Material Breach of Contract

Nonmaterial breaching parties that do not substantially get what they contracted for are more than likely to prevail in a lawsuit. For example, there will be a material breach of contract on a construction project to build a three-story house when the owner comes back and only finds two stories.  

The ultimate outcome is important. Alternatively, when looking at what constitutes a material breach of contract, if the allegations only impact the minor details and do not actually influence the overall outcome of what the parties agreed to, then there is no breach. Keep in mind that when pointing to a breach by the expressed terms of the contract, litigants typically will prevail in a lawsuit. See information about quantum meruit.

In contrast, a non-material breach or “minor” contract breach definition means a failure to perform a duty that only involves minor details that do not affect performance outcome.

A non-material breach is usually considered to be less severe than one that is material and is often unrelated to the subject matter of the agreement. When litigating a breach case, a court may look at:

• The benefit received by the non-breaching party;
• If the breaching party can be adequately compensated for the damages;
• Extent of performance by the breaching party;
• Hardship to the breaching party; and
• The likelihood that the breaching party will perform the rest of a valid contract.

Commercial Contracts: In commercial contracts, the applicable contract default and material breach definition depend upon the particular facts. The history and relationships between you and the other party could be highly relevant. See SBA Affiliation Rules – Important New Government Contract Small Business Guidance. See also, Difference Between Teaming Agreement vs Joint Ventures

• It is important for you to note that remedies for breach of contract are not used by courts to punish the breaching party.  You may want to consider specific performance.
• Your remedy is essential to get what you initially bargained for. Therefore, any material damages would be fashioned accordingly.

Material Breach Definition in Government Contracts

In Federal Government contracts, you must realize that there is a substantial amount of material breach of contract clauses embedded in construction contracts and service contracts from the Federal Acquisition Regulations.

Typically, when you do not comply with any of these clauses, you presumably fall within the material breach definition. The Contracting Officer will usually issue a cure notice that ultimately ends up in a termination for default. See also, Government Contract Disputes Act CDA Certification Requirements and Breach of Contract Damages in Government Claims.

Analyzing the material contract definition on federal government projects can be tricky. As compared to commercial practices, government contractors generally must continue performance until any dispute with the contracting agency is resolved. This is required under the Contract Disputes Act.  See also FAR 33.213. See more information about breach of contract claims against the government. See also Construction Contract Claims Appeal for Government Contracts.

Filing a case against the government for material default can be an uphill battle if you do not have the right lawyer in place. The Government has a duty of good faith and fair dealing when participating in contracts.

For example, the government may allege you committed a material breach, and then threaten to terminate you. 

• In other situations, you may be filing a claim and the government uses threats of alleging a breach with the goal of settling for a lower amount.
• Courts have found this to be surmount to a violation of the implied duty of good faith and fair dealing but not necessarily a substantial breach.

When does breach of contract become criminal in government contracting? Generally breach of contract is not viewed as a crime. However, when there is a federal contract involved, one can very well be charged criminally if the breach also involves false misrepresentation, substituting contracted for materials with inferior materials. In this example, there is certainly a breach while still committing fraud against the United States.

Do You Have an Enforceable Agreement in Place?

Before you file a lawsuit for breach of contract, you want first to analyze whether you have a valid and binding agreement. You can only be held legally responsible for a material breach of a contract if the agreement is enforceable by the Court. Before advancing on a breach theory, both you and the other party must show agreements about the legally binding contract terms.

You must also show consideration and mutual obligation, legality, and any writing requirements when trying to show that you have a valid contract. If the allegedly breaching party substantially performed, your attorney would want to evaluate any risk of litigating a material breach of contract case. 

Other Things to Consider: When deciding whether to retain a contract law attorney, the first thing you should carefully assess is the type of damages you seek from a court. Again, litigation is not intended to punish the other side. Rather you want to consider what damages you suffered as a result of the breach.

You also wish to present evidence so that your attorney can quantify the damages and adequately present them in court.  When analyzing a case for the breach definition, you want to gauge whether the other side can solve the problem and perform under the agreement. A judge will consider this. Learn more about common law breach remedies.

You must send a notice to the breaching party. One of the costly mistakes you can make when dealing with a material breach clause dispute is not to send the other side notice of the claim.

The opposing attorney could potentially get your case dismissed. This is especially true if the contract provides for written notices. High profile contracts typically would have this clause included.

If you are contemplating filing a lawsuit or have been sued, contact a breach of contract lawyer for direct representation. Your facts may not fall within the material breach definition.

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