When an attorney drafts an agreement for two or more parties to sign, both parties expect that all contracted parties will abide by the terms of the contract.
If one party fails to perform according to the terms they agreed to, a breach of contract has occurred. While any breach of contract can be considered an inconvenience, some breaches are more serious than others. A more serious breach is called a material breach, or the failure to perform in a significant way that can result in termination of the contract.
How do courts determine whether a breach is material?
The Restatement (Second) of the Law of Contracts can help a court decide whether a breach is material. The court will consider the following:
- Was the injured party deprived of something because of the breach? If so, the breach may be classified as material.
- Can the injured party be compensated for the breach? If so, it is unlikely to be a material breach.
- How far into the contract have the parties progressed? If no work has been performed and the contract was just formed, the breach may be considered material.
- Is the breach easily fixable? If so, the breach may not be material.
What happens if a breach is material?
If another party materially breached your contract, you may still have to perform your duties under the contract. However, you may be able to recover monetary damages for any losses you sustained because of the breach. A business law and commercial litigation attorney in Illinois can help evaluate your case and move forward with your claim.