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Material breach and available remedies in California

On Behalf of | Nov 3, 2014 | Contract Disputes

Written agreements in many cases will contain provisions regarding remedies in the event of a material breach. A material breach in contract law is a failure to perform that irreparably breaks the contract and is often also referred to as a total breach. In the event of a material breach by one party to the contract, the other party reserves the right to terminate the agreement and go to court in an effort to collect damages related to the breach.

In certain cases, the parties to a contract will include provisions relating to remedies in the event that a breach occurs. Sometimes such provisions are only restating what is already provided under the law. Often these provisions will simply serve to lengthen the agreement. In addition, including a large number of provisions for remedies in an agreement could serve to imply that one or more of the parties will not be entitled to any remedies not referenced within the agreement. Some remedies, especially equitable ones, remain at the discretion of the court. This also includes an award of specific performance. Basically, any breach could result in a claim for damages, but a material breach is generally the only type that serves to excuse a non-breaching party from its obligation to perform.

For clarity, a contractual agreement could specifically present the circumstances under which a breach by either party would excuse the other. The clause in the agreement, however, should not try to identify every potential breach that might defer the duty to perform of the other party. Doing so could necessitate a total confidence that no other breach could possibly arise.

When questions arise regarding material breaches and the legal rights of a party to an agreement, reliable legal advice from a business and commercial law attorney could help. The attorney could assist with drafting the initial agreement or later with handling business litigation.

Source: American Bar Association, “When to Contract for Remedies”, Stephen L. Sepinuck , October 29, 2014