A material breach of contract (sometimes called a “total breach”) is a failure to follow through on a contract in a fundamental way, such that the agreement is deemed “irreparably broken” and the purpose of the contract is defeated.
In all cases of breach of contract – material or not – the non-breaching party may take legal action against the breaching party. But only in cases of material breach may the non-breaching party cancel the deal entirely.
When deciding whether a breach of contract is a material breach, a court will examine several factors. Was a party deprived of the “heart” of what they bargained for? (In other words, did the breach defeat the purpose of the contract?) Can the non-breaching party be compensated? How likely is the breaching party to fix the problem? What will the breaching party forfeit if the contract is canceled? (That is, have they already put a lot of money or time into fulfilling the contract?) Did the breaching party act in bad faith? (In other words, was the breach willful, or resulting from unfair dealing?)
Any breach of contract may deserve legal attention, but only a material breach permits a party to cancel the contract. If you are involved in a contract dispute, contact the attorneys at the LaGarde Law Firm.