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On behalf of Kadish & Associates Law Group posted in Business Litigation on Friday, September 22, 2017.

Contracts in business are very serious matters. You have to make sure that your company can uphold the terms of the contract when you sign one and you expect that the other party will uphold their end of the deal. When a contract is broken, or breached, businesses can suffer.

There are two kinds of damages that can occur when a contract is breached. These are known as material or immaterial. Which one a breach falls under depends on the contract and the circumstances of the breach.

One easy way to differentiate between the two types is that there has to be a monetary damage associated with a material breach, but an immaterial breach is more of an inconvenience. An example that is commonly used to show the difference revolves around the delivery of goods.

If a company states in a contract that your goods will be delivered on a specific date, the breach is likely immaterial if the goods are late. However, if there is wording in the contract that makes it clear that late deliveries aren’t acceptable because time is of the essence, the breach becomes material.

When a contract breach is material, you might decide to pursue monetary damages. You also have the option of fighting to have the terms of the contract enforced. It is imperative that you think carefully about both options because they can both impact your business.

It is possible that you could cancel the contract if it is breached, but again, you need to consider the way that it will affect your business. You certainly don’t want to take any steps that might negatively impact your business.

Source: FindLaw, “Breach of Contract and Lawsuits,” accessed Sep. 22, 2017