What is a material breach in a contract dispute?

Businesses in Louisiana enter into contracts in good faith – they don’t expect a breach of the terms of the contract by either side. However, many contracts will include sections that address how potential issues of breach will be addressed, with many including clauses that call for arbitration instead of litigation. But, most cases will only proceed to this point if there is a material breach that is alleged to have occurred. What is a material breach?

There are varying levels of a breach of contract. At its essence, a breach just means that one side or the other isn’t complying with the terms of the contract. In some cases, the breach can be remedied in short order. However, a material breach may take the issue too far.

A material breach means that the breach is so substantial that the contract might not be valid anymore, allowing one side or the other to cancel the contract and initiate litigation to recover damages. The party that is claiming that a breach of the contract has occurred may have the legal right to suspend any obligation of performance under the contract.

Contract disputes can arise for many different reasons but, in most cases some type of breach is alleged. However, businesses in Louisiana that are facing these issues are not without legal options. While many companies prefer to avoid litigation if at all possible, a material breach of a contract may leave the company with little choice but to pursue a remedy in court.

Source: FindLaw, “Breach,” Accessed May 14, 2017