At the outset of any working relationship, a contract should be made. This contract will outline everything that the two parties intend to do together, how long it should take, and what compensation is involved.
For example, let’s say the imaginary Orange Company just opened up a new office and wants to have coffee to serve any customers that come in. Rather than buying some from the store, they strike up a deal with their local Good Coffee Company to deliver some to their office periodically. They would both agree to a contract detailing how much coffee they wanted, how often it would be restocked, how long this was going to happen, and how much the Orange Company was going to pay them in return.
If anyone does something that goes against the contract, it is considered a Breach of Contract. Breaches of Contract can be small things, or they can be major, deal-breaking changes. There are two kinds of Breaches of Contract: Material and Minor. As you might imagine, a Minor Breach of Contract is less severe than a significant one.
Let’s look back at our earlier contract. If the Good Coffee Company continually delivers a different kind of coffee than the one the Orange Company asked for in the contract, this is a Minor Breach of Contract. The Good Coffee Company says this has been happening accidentally and not maliciously. They are still delivering great coffee on the same schedule they agreed to, and the Orange Company’s clients are still drinking it and enjoying it. It just isn’t the kind they wanted in the contract. In this situation, the Good Coffee Company could probably just promise to send the correct type going forward and continue with the contract.
Now let’s look at a different situation. The Good Coffee Company stops delivering coffee at all on any regular schedule. The Orange Company is having difficulty getting in contact with them to ask what is happening. The Orange Company’s clients are going thirsty and wondering where the treatment they are used to has gone. This is a Material Breach of Contract. It is so significant that the Orange Company, even though they did not make the breach, should also be excused from their half of the contract and no longer pay the Good Coffee Company.
A Minor Breach of Contract is anything where something small has gone wrong, but the rest of the work went correctly. A Material Breach of Contract is a substantial issue that makes the whole contract void and allows the non-breaching company to sue the other for damages. If you are trying to determine if a breach was Minor or Material, consider any damages you received. If your business lost money as a direct result of the breach, it was likely Material. If you didn’t lose any money, it is likely a Minor breach and it would be difficult to receive any sort of compensation if you sued the other party.
You can also consider the quality of the work involved. If you still received a high-quality performance, as you originally wanted, it is likely a Minor Breach of Contract. Anyone looking at a Breach of Contract case will take whether the breach was intentional or accidental as a factor as well. They also will consider how long the breach was happening and how much it affected the other party. If a breach has been happening for six years, you’re not going to sound very convincing saying that it is Material when you’ve been putting up with it just fine for that long.
If a contract you are involved in has been breached, contact Concerto Law today. We can help you determine if it was Minor or Material and what your next move should be. The longer you wait on it, the harder your case will be. We have legal solutions that break through the noise!