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Business contracts are a key component of every business and are essential in defining responsibilities and tasks to ensure that both parties are held responsible for their roles. It’s common in business that for one reason or another, one party is incapable of holding up their end of the deal, which creates a situation where they are in breach of contract.
There are three common types of breaches, each with its own degree of severity:
- Total and Material Breach
- Material BUT Not Total Breach
- Not Material (Substantial Performance or Partial Breach)
A breach of contract can be a very frustrating situation for a business, and they can even cause major repercussions on the business. In today’s litigious society, business contracts have become far more complex, meaning that the wording of contracts, or alteration of contracts can make a significant difference on liability and responsibilities.
1. TOTAL AND MATERIAL BREACH
A Total and Material Breach of contract allows the non-breaching party to:
- Withhold Performance;
- Terminate; and
- Claim full damages for Breach
2. MATERIAL BUT NOT TOTAL BREACH
- A Material BUT not total breach of contract allows the non-breaching party to:
- Suspend Performance
- Await Cure
- Claim Compensation for any loss suffered
3. NOT MATERIAL BREACH (Substantial Performance or Partial Breach)
A non-material breach of contract allows the non-breaching party to claim compensation for any loss suffered. This is to say when a party has substantially performed, the deficiency in performance s said to be a partial breach. However, the reference to total and partial breach is also used to identify a somewhat different, but related issue: A breach is called partial when, even if it may become material in time, it is not yet important enough to so qualify, because there is possibility of cure.
Our firm is based in Los Angeles where our lawyers have acquired over 10 years of combined experience in legal representation. Our skills and knowledge are a top resource for our clients that has been recognized by industry peers and judges. If you have a business matter specifically involving a breach of contract, please take a moment to fill out the form below so that we may get in contact with you.
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