Contracts create legal obligations that the parties to the Agreement must fulfill. If any party to a Contract fails to honor the negotiated Agreement, this failure is considered a Breach of Contract. The other party may respond by taking legal action to compel performance or to recover monetary compensation for losses caused by the breach. The other party may also be excused from performing his part of the contract after a breach has occurred.
Contracts can contain many specific terms and there may be many requirements imposed upon each party. A failure to fulfill any one of the requirements does not automatically constitute a breach that would allow for the Contract to be cancelled or that would make it possible for monetary damages to be recovered. It is important to understand the difference between a Material Breach and a Non-Material Breach so you can understand the options available to you. A Scottsdale Arizona business litigation attorney at Lotzar Law Firm, P.C. can help you with all types of contract disputes so call today to schedule a consultation and learn more.
Understanding the Difference Between a Material Breach and a Non-Material Breach
A Material Breach of Contract is a major failure to perform according to the terms of the Agreement. The failure to perform goes to the heart of the Contract and negatively affects the value of the contractual arrangement.
A Non-Material Breach, on the other hand, is less serious. It pertains to a more minor detail of the contract or to ancillary provisions of the Agreement that do not go to the heart of the Contract.
Determining whether a breach was material or non-material requires a careful analysis of the specific failure to perform. For example, if two parties contract for a home to be painted with white primer and a yellow finish coat, it may be considered a Non-Material Breach if a cream primer is used instead of white but a Material Breach if a blue finish coat is used instead.
The use of the cream primer deviates from the terms of the Contract but does not effect the functionality of the Agreement. The use of the blue paint instead of the yellow paint, on the other hand, goes to the heart of the contractual Agreement because the home owner does not end up with the desired yellow house.
Your Rights After a Material or a Non-Material Breach
Your rights differ depending upon whether a breach was material or non-material. In both cases, you may take legal action to recover the actual value of losses caused by the Breach. However, you typically must fulfill your part of the Agreement when a Non-Material Breach occurs. A Material Breach, on the other hand, may excuse you from your performance obligation.
An attorney can help to determine the difference between a Material Breach and a Non-Material Breach and can assist you in making a Breach of Contract claim. Call Lotzar Law Firm, P.C. today to schedule a consultation with a Scottsdale business litigation lawyer to learn more.
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