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Overview of A Material Breach of Contract

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A material breach of contract, also known as a total breach, is when one party fails to perform their duties as it was agreed upon in legal documents. Consequently, the breach renders the contract “irreparably broken” which defeats the entire purpose of such paperwork. 

Fortunately, there are legal steps that can be taken if this situation arises. The non-breaching party can end the agreement and take the other individual to court in an attempt to collect damages caused by the breach. Whether the contract dispute involves a complex contract, business, or employment contract, our Miami contract dispute attorneys have the knowledge and passion to attain the best outcome for every case that comes their way.

Proving a Material Breach of Contract

When determining if a breach is material or not, courts normally refer to the Restatement of Contracts. Below are the relevant factors used to decide whether a material breach occurred:

  1. The Level of Breach: If the breach diminishes the overall purpose of the contract, it is considered a material breach. For example, if a person purchases a piano that is said to be signed by a famous musician and they instead receive a standard piano with no signature, this would be considered a material breach because it goes against what was agreed upon. The purpose of the purchase and the contract was to receive a one-of-a-kind piano. 
  2. Possibility of Compensation: Another factor that plays into determining a material breach is investigating whether compensation is a remedy. If the non-breaching party can be compensated for the breach, it is rare that it would be considered material. Compensation can be in the form of either money or a service.
  3. Loss for the Breaching Party: If the breach occurred before the breaching party completed, or performed much of their duties, the breach may not be material. For example, if a contractor was hired to perform a home renovation and the breach was declared when the contractor had one week left to finish the agreed-upon services, this breach would not be considered material. A material breach would more likely be considered if the work had not yet begun or had only recently begun. 
  4. Chances of Fixing the Breach: If the breaching party is willing to fix the issue, it is less likely to be considered material. 
  5. The Breaching Party’s Intention: If the breach resulted from negligence or circumstances beyond the party’s control, it is less likely to be a material breach. However, if the breach occurred out of bad faith or was an intentional breach, it may be considered material.
  6. The Non-Breaching Party’s Intention: Even if one party breached the contract, but the other party was not ready, willing, and able to perform its obligations under the contract, the breach would not be considered material.

Solutions for a Material Breach 

If one suspects a material breach of contract, the non-breaching party can end their side of the transaction and terminate the contract. They can sue the breaching party for violation of the contract and receive compensation for damages. 

Review the contract to see whether there is a clause that states what steps must be taken if a breach occurs. Most contracts have specific instructions in the event of a breach. 

The Take-Away

If a contract was made and one party breached, it is imperative to determine if the breach was material or not, and what type of damages can be recovered. Contact one of our expert Miami contract dispute attorneys for a free no-obligation consultation! 

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