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A material breach is a serious violation of a contract that can result in court action. The injured party must prove the breach and its value, and the court may order compliance or compensation. The contract may be voided, but parties can choose to continue. Defenses include fraud, pressure, modification, or impossibility.
A material breach is a breach of the terms of a contract that is serious enough to destroy the value of the contract. This breach may relate to a breach which is stated in the contract as serious enough to void the contract or may be implied under the provisions of the contract. Not all breaches of contract may constitute a material breach. Parties who believe that such a violation has occurred may seek remedy in court.
For a material infringement to be proven, the first thing an injured party must do is prove that an infringement has occurred. If this fact is controversial, this may be the hardest thing to prove. Those making such an allegation should document the violation as fully as possible and be prepared to submit that information to the court. The court may have several options to remedy the situation.
Once the party has shown that a material infringement has occurred, the next step is for the court to establish the value of the infringement. For example, if a contract was to supply 10 cars to a government agency and the money was paid but only five cars were delivered, the value of the material breach could be half of the total contract. Other monetary compensation may also be included for hardships and prosecutions.
After determining the value of the material infringement, the court usually has a couple of options. One of them is to oblige the defaulting party to comply with the terms of the contract. If this is not possible or practical, the court may order the at fault party to provide the other party with monetary compensation. This award could include both actual damages and punitive damages, intended to punish a company for wrongful actions.
Generally, after the judicial remedy for a material breach has been completed, the contract is void. If the contract covers performance or services for a longer period of time, it may be up to the parties if they wish to continue the relationship. Lawyers can ask the court to look specifically at the status of the contract in the order issued by the judge.
Those claiming a material infringement should also be prepared for a number of different defenses. Among the most common are that the accusing party defrauded the other party, that the contract was signed under pressure, that the parties agreed to modify the contract, or that other situations made it impossible to fulfill the terms of the contract. The burden of proof on the defendant is the same as the burden of proof on the plaintiff.
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