A material breach of contract occurs when a party fails to perform a substantial obligation under the agreement, which would result in a failure of the purpose of the contract. For example, failing to deliver goods or services as agreed, or not meeting quality standards as outlined in the contract.
To protect yourself against material breaches, you can:
– Clearly define the terms and obligations of the contract in writing
– Include provisions for how breaches will be addressed and the remedies available; these remedies being of adequate significance to deter the parties from committing breaches of the contract
– Conduct proper due diligence before entering into a contract
– Consider using an arbitration clause to resolve disputes, which could enable the commercial relationship between the parties to remain, to both parties benefit
– Keep detailed records of all performance under the contract
If you believe a material breach has occurred, it is advisable to seek legal counsel to understand your rights and options under the contract and applicable laws.
