White Paper

Material Breach and the Consequences of Being Wrong

 

Changing the facts slightly can make material an otherwise immaterial breach.

It’s not uncommon for parties to a construction contract to exchange heated letters accusing each other of material breach of their contract.  Determining whether a breach occurred is easy compared to determining whether that breach was material. Damages are recoverable regardless of whether the breach is material. But in addition to recovering damages, a material breach gives the non-breaching party the option to either stop their performance and terminate the contract or continue to perform the contract.