Some common examples of equitable remedies include the following: Thus, if a material breach has occurred, then the court may issue an equitable remedy (as opposed to a monetary remedy) to help the non-breaching party, or in some cases both parties, recover from the damage caused by the incomplete fulfillment of their deal. A material breach generally makes it exceedingly difficult to nearly impossible for the parties to be able to complete their contract. What Remedies are Available for a Material Breach of Contract?Īs previously mentioned, a material breach is a much more serious kind of contract violation. Obviously, there are exceptions to this rule depending on the circumstances involved. In other words, a breach does not necessarily mean that the contract is cancelled, so be prepared to be compelled to fulfill it. This means you are responsible for any damages you have caused due to the breach and may be forced to perform your side of the bargain regardless. One final thing to note is that when you are the person who breaches a contract, the contract is not discharged until a court deems it so. If there is one available in your particular contract, then it will most likely dictate how the entire issue is settled.
#Material breach example how to#
In most cases, however, there is usually a clause located in the parties’ contract for how to handle a breach. If there is no way to fix the issue, then you should contact a contract lawyer to initiate a lawsuit where you can either sue to compel the breaching party to perform their half of the contract or seek other damages to recover what you have lost. If they cannot, then be sure to document all evidence that you completed your promise and save anything that shows they did not hold up their end. On the other hand, if you are the non-breaching party, then you should reach out to the other party to figure out if they can fulfill their side of the bargain. You should also contact a contract attorney to ensure that there was an actual breach and so that you are protected in the event your matter goes to court. It is important that you document every way in which you tried to make up for your error. If you are the one responsible for causing the material breach, then you should try to minimize the damage as much as possible by either performing your side of the bargain, asking the other party if there is another way you can make up for your mistake, or supplying an alternative remedy. This is because the remedies for a material breach of contract typically go beyond monetary damages, and call for an equitable remedy. Material breaches often require a court’s intervention before it can be resolved. What Happens If You Committed a Material Breach of a Contract? Similar to the buyer purchasing a rare item, the parties here may also cause a material breach of their contract if the receiver fails to make payments for the goods or the shipper fails to deliver the proper goods to the buyer. A common scenario is when two companies enter into a contract that involves one of them shipping or supplying goods to the other. Much like the house example, this scenario can also be reversed where the buyer never pays the seller after receiving the item.įinally, material breaches can also happen in business settings like when two parties contract for services. If the buyer pays for the item, but the seller does not give or ship it to them and instead hands it over to someone else, then this would be considered a material breach of contract. If the buyer completes all of the necessary paperwork, pays the seller at the closing, but the seller suddenly decides not to sell or refuses to give up the deed and keys to the house, then this would be considered a material breach of contract.Īlternatively, if the seller goes through all of the steps to sell their house and then the buyer refuses to pay, then this could also be considered a material breach of contract.Īnother example of a material breach is when a buyer is purchasing a rare item from a seller. One example may occur when someone is purchasing a house. As such, a material breach of contract can arise in many different areas of everyday life.
What are Some Examples of a Material Breach of Contract?Ĭontracts cover a broad variety of topics.
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