A contract is a legally binding agreement between two or more parties wherein those parties exchange value for value. In Cincinnati, this exchange most often consists of money in return for goods or services. When one of these parties neglects to perform their duties according to this agreement, a breach of contract occurs. According to the National Paralegal College, the question then is whether the breach is minor or material.
The main distinction between a minor and a material breach of contract is that in minor breaches, the injured party must still hold up its end of the contract, but it may also sue for damages resulting from the breach. A material breach not only allows the innocent party to sue for damages, but also releases the party from its contractual obligations.
In a minor breach of contract, the receiving party still gets the goods or services contracted for even if the breaching party did not meet a specific contractual obligation. For example, if ABC Catering Company ordered 300 lavender table linens delivered by June 1st for a wedding reception on June 9th and they arrived on June 8th, the company providing those linens could be sued for a minor breach of contract. In such a situation, the receiving party may sue for only the damages caused by breaching this single contractual element.
According to The University of New Mexico’s Judicial Education Center, in order to determine if a contract breach is minor or material, the court addresses each situation on a case-by-case basis. These are the issues considered in the court’s decision making process:
- Whether the breaching party is likely to fulfill what remains of the contract.
- How the non-breaching party might have benefited from the breach.
- If the breaching party’s actions were accidental, willful or negligent.
- How much of the contract the breaching party violated.
- The extent to which paying damages would harm the breaching party.
- If it is possible to sufficiently compensate the non-breaching party.
Based on the court’s review of these six factors, it will be able to decide if the contract breach in question is minor or material in nature.