General

Are all contract breaches created equal?

When you sign a contract, you are legally obligated to comply with the terms of that document. Should you or the other party fail to perform certain tasks, withhold payments or otherwise violate the terms of a contract, it is referred to as a breach of contract.

Breaches can be costly, especially when property, confidential information or business interests are at stake. However, there are different types of breaches: minor and material.

Minor breach

A minor contract breach (sometimes called an immaterial or partial breach) is a breach that does not significantly affect the non-breaching party. There may be little or no damages suffered by the non-breaching party. However, it is still failure to perform or comply with terms of the contract.

For instance, let’s imagine you sign a contract to create a logo for a company, and your contract dictates that you create and deliver a final design by Friday. If you have some delays and deliver the design on Saturday morning, then that could be a breach. However, unless the late delivery impacted projects or caused financial damage, it could be deemed a minor breach.

Material breach

A material breach, on the other hand, is a substantial breach. It means that you failed to comply with the terms of a contract to the detriment of the non-breaching party.

Using the example from above, if the late delivery was in violation of a contract that explicitly stated the design was to be revealed at a special event on Friday evening, then the breach could be material. The failure to deliver by the specified time was a violation of a major part of the contract.

Why the type of breach matters

The legal options and remedies will vary based on whether a contract breach is minor or material. In minor cases, there may be little or nothing to do outside of paying the non-breaching party for any damages. In material cases, damages can be awarded in addition to contract cancellation, restitution and/or orders to perform duties under the contract.

Should you have any concerns or questions regarding whether a breach occurred or whether the breach is material or minor, it would be wise to discu ss them with an attorney.

Tue Aug 28, 8:16pm