A contract creates a legal obligation between two parties. If one party fails to live up to their end of the bargain and doesn’t comply with the agreed-upon terms, that’s considered a breach of contract.
But not all breaches of contract are the same: Some are considered “material,” and some are not. Knowing the difference between the two is important to understand your options after a breach of contract has occurred.
Basically, an immaterial breach is one party’s failure to live up to the contract in a minor way. A material breach, however, is a much more spectacular failing. It’s the difference between installing brass plumbing fixtures in the bathroom you built for a client when you were supposed to use nickel and forgetting to install the plumbing at all. One may leave the client unhappy with the job — the other makes the client’s bathroom unusable.
The rights of the aggrieved party differ in these two situations as well. If the builder uses the wrong fixtures, the client would surely be justified in demanding that they be replaced with the proper nickel fixtures — but they wouldn’t likely be able to simply refuse to pay their builder. On the other hand, a client whose builder forgets the plumbing entirely might very well be excused from having to pay.
Contracts are designed to prevent lawsuits, not create them — but disagreements still happen. If a breach of contract between your company and another company has led to a lawsuit, be prudent: Take steps to protect your legal interests.