The Ins and Outs of a Material Breach of Contract
A breach of contract happens when a party to a contract fails to uphold their end of the bargain. There are four common types of breach, but the most serious one is a material breach of contract. This article will explain how to recognize it, which remedies you can demand, and whether you need to file a lawsuit to collect damages. DoNotPay will also draft a watertight breach of contract demand letter to help you resolve the matter out of court.
A material breach of contract is also known as a total breach because the violation of its terms makes the agreement useless. If it occurs, the non-breaching party does not have to uphold their end of the contract and can seek legal remedies to recover from the damage that the breach caused.
When one party commits a material breach, it makes the agreement irreparably broken under law, enabling the non-breaching party to take the matter to court to collect the damages.
To seek remedies—whether in or out of court—you need to prove the following elements of breach:
- The existence of the agreement
- Promisor’s failure to fulfill the terms of the contract
- Damages that the promisee suffered as a result of the breach
Check out examples of a material breach of contract below:
- Someone is buying a house, and they upheld all the contract terms, such as completing the necessary paperwork and putting a deposit towards the house. A material breach happens when the seller suddenly decides not to sell the property
- Two companies enter into a contract where one party (promisor) is supposed to supply the other party (promisee) with specific goods. If the promisor does not deliver the goods listed in the agreement, the contract is breached
If a material breach of contract occurs, you should send a demand letter to the breaching party to request they fulfill their side of the contract. If they do not respond, you can take the matter to court. You will need to prove that you held up your end of the contract and that the other party did not.
Some of the common types of equitable remedies you can seek in court are:
|Material Breach of Contract Remedies||Description|
|Contract rescission||Rescission allows the injured party to return to the position in which they were before the contract was made. Rescission is a type of equitable remedy that makes the contract void|
|Specific performance||In case of the specific performance remedy, the court orders the breaching party to perform contractual obligations as closely as possible. The court takes this approach if the monetary damages are not enough to fix the issue|
|Contract reformation||Contract reformation means changing the contract when the injured party proves that the agreement was breached. The court usually opts for this remedy when the parties overlooked an error in the contract or the breaching party deceived the non-breaching party|
|Issue of an injunction||An injunction is a court order that requires a party to, for example, fulfill their side of the deal|
Keep in mind that the defendant might use affirmative defenses as legal excuses for why they breached the contract.
To demand compensation for a material breach of contract, you should create a demand letter before filing a lawsuit. You have several options:
- Write a demand letter yourself—This option is not ideal if you are unfamiliar with the legal terminology. If you are tempted to use demand letter templates, keep in mind that they are generic and probably won’t contain all the points of your case
- Hire a lawyer—Hiring a lawyer will solve your issue, but you should know that it is not the most affordable option
- Use DoNotPay—Our budget-friendly app can create a professionally written demand letter in minutes
DoNotPay can create a watertight demand letter that will:
- Contain all the key points of your case
- Meet legal requirements of a demand letter
- Be fully personalized to your case
To acquire a rock-solid demand letter, sign up for DoNotPay and follow the steps below:
- Select the Client Breach of Contract tool
- Provide the necessary details, such as:
- Name of your client
- Terms of the original agreement
- Due date of the payment
- Amount the client still owes you
- Specify the final due date by which you expect the client to pay
In the letter, we will inform your client of your intent to take the matter to court if they fail to pay damages by the due date. Once you complete the steps, DoNotPay will generate the letter in your stead, and you can send it to your client immediately.
If you want to get familiar with state-specific breach of contract regulations, consult the following table:
|South Carolina||North Carolina||Florida|
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