Unfortunately, the case law does not provide clear guidance to determine when a breach is material or substantial enough to excuse further performance and terminate. “Forfeitures are not favored, and are subject to a very strict construction.” As a result, the benefit of doubt as to whether a breach is material goes to the non-terminating party. In addition, terminations are considered forfeitures of the breaching party’s contract rights. If the breach is determined to not be material, then the terminating party will itself be in material breach for stopping their performance and wrongfully terminating the contract, even if the right was exercised in good faith. The option to stop performance and terminate for material breach should not be exercised casually.
But in addition to recovering damages, a material breach gives the non-breaching party the option to either stop their performance and terminate the contract or continue to perform the contract.
#DEFINE MATERIAL BREACH MOVIE#
This would most likely be a material breach because the essence of the sales contract was the sale of the car used in the movie “My Cousin Vinny.”ĭamages are recoverable regardless of whether the breach is material. Take the same sale, but add that the sale was of a car that had been used in the filming of the movie “My Cousin Vinny.” The seller delivers the exact same type of car used in the film, but it is later determined that the car had not in fact been used in the movie. Would this be a material breach? Not likely because a material breach goes to the essence of the deal, which in this case would be the sale of a vintage automobile.Ĭhanging the facts slightly can make material an otherwise immaterial breach. For instance, a seller would breach a contract to sell a 1964 metallic mint green Buick Skylark convertible with Michelin Model XGV tires, size 75-R-14 to a buyer if the seller delivered a 1964 metallic mint green Buick Skylark convertible with Uniroyal size 75-R-14 tires because the seller did not provide the specified tires. Whether that breach is material turns on the facts and circumstance surrounding the formation of the contract and is often a matter of degree. Determining whether a breach occurred is easy compared to determining whether that breach was material.Ī breach is a failure to perform an express or implied obligation under a contract. It’s not uncommon for parties to a construction contract to exchange heated letters accusing each other of material breach of their contract. Authored by: Scott Cahalan and Darren Rowles
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