Contracts range from multi-party complex commercial transactions to residential real estate agreements and everything in between.
Parties need to understand their legal rights and pursue compensation if the other party fails to follow through as promised. Not following through on a contract is, in legal terms, called a breach.
A material breach of contract occurs if someone’s failure to abide by the terms of the deal defeats the purpose of the agreement or renders it impossible to complete.
Unlike a minor breach, a material breach has a consequential impact on the outcome of the deal and, in most cases, causes it to fall through entirely. If someone commits a material breach, the other party may have a legal claim against them in Ohio if the contract is governed by Ohio law.
What Are the Different Types of Breaches of Contract?
There are four main types of breach of contract: actual, minor, material, and anticipatory. An actual breach occurs when someone does not follow through on their obligations under the terms of the agreement between the parties.
In contrast, an anticipatory breach is when a party realizes they cannot or will not perform under the deal and tells the other party ahead of time. In other words, the time for performance (e.g., the closing date) has not come up yet, but the party indicates they won’t perform when that date arrives.
A minor breach is a mistake or misunderstanding that does not impact the outcome of the deal. Or it is one that the parties can easily remedy. For example, a clerical error or minor defect the other party can fix without issue may constitute a minor breach. Conversely, a material breach of contract is an intentional, inadvertent, or negligent error or refusal that impacts the purpose or possible outcome of the bargain.
What Is a Material Breach of Contract?
A material breach of contract is something that prevents the parties from carrying out the deal under the stated terms. The breach may be the result of something unexpected, such as an act of God or an unforeseeable, uncontrollable event that renders it impossible for the purpose of the contract to occur. Or it can be something intentional, such as a willful refusal by one party to do what they promised to do in the agreement.
What Are Material Breach of Contract Examples?
Material breaches fundamentally alter the contract or render it impossible to carry out. It can be something that undermines the purpose of the agreement.
Let’s go over some examples of material breaches of contracts.
- Example One: Party A and Party B enter into a contract where Party A will provide refreshments at an event hosted by Party B on a specific date for the stated price. On the contract date, Party A shows up with the catered refreshments, but Party B is nowhere to be found and refuses to pay for the goods. Party B most likely committed a material breach.
- Example Two: Party A owns a grocery store, and Party B sells canned vegetables commonly sold in stores. Party A orders 1,000 assorted cans of vegetables from Party B at a stated price to be delivered the following Monday. On Monday, Party A received a shipment of 1,000 canned fruits from Party B instead of the canned vegetables Party A ordered. Party B may have committed a material breach unless they can correct the error.
- Example Three: Party A hires Party B to build a custom residential suite by a specific date. Party B constructs a residential suite as promised. Party A refuses to pay for the work. Party A likely committed a material breach of contract.
The examples of material breaches are almost endless, limited only by promises made in a contract. Anytime a contract is irreparably broken, or the purpose of the contract is defeated, you are likely dealing with a material breach.
Contact Our Experienced Contract Law Attorneys in Ohio
Going through a contract dispute can be frustrating and stressful. You, your business, or your family may depend on the outcome of the contract and the conflict, making it especially important to act carefully.
Our team has years of experience helping individuals and corporations resolve even the most complicated contract disputes. We work hard to understand your perspective, what happened, and the result you would like to see. Clients praise us for our responsiveness, our ability to help them feel welcomed and supported, and our ability to produce results.
Aaron Bensinger was named a “Rising Star” in 2014 and 2015 by Super Lawyers. If you are involved in an Ohio contract dispute, contact our office today to schedule a consultation by calling (419) 455-1410 or reaching us online.