When Is a Contract Breached?
A contract is breached (broken) when either one or both parties fails to perform as promised in the contract. A breach may occur when a party:
- refuses to perform its promises under the contract
- does something that the contract prohibits, or
- prevents the other party from performing its obligations under the contract.
Some contract breaches are more serious than others. The law distinguishes between material (or total) breaches and immaterial (trivial) breaches of contract.
Material Breach of Contract
A material breach of contract (sometimes referred to as a “total” breach), is serious and gives rise to a cause of action in court. A material breach goes to the very heart of the contract. It renders the contract “irreparably broken” and defeats the purpose for making it in the first place. For example, suppose your company agrees to pay a violinist $500 to play at a company-hosted event, but the violinist shows up at the party without his violin. The violinist has materially breached the contract to perform if he cannot play. Stacy is not a violinist and she has more than materially breached her contract.
When there is a material breach of contract, the injured party can go to court and seek damages–a money payment adequate to cover economic losses resulting from the breach. A total breach of contact will also usually terminate the nonbreaching party’s duty to perform any of the promises he or she made in the contract. For example, your company would have no legal duty to pay the violinist who couldn’t play as promised.
And the Contract is enforceable because it does not follow the criteria of not being enforceable:
- There was a mutual mistake as to an essential fact in the contract–for example, both parties were mistaken as to the authenticity of something. NO MISTAKE HERE
- a party lacked capacity to contract—for example, one party was a minor or mentally incapacitated – Perhaps the latter applies because of her alleged drug use.
- a party was fraudulently induced to enter into a contract—for example, one party lied to or threatened the other to get him or her to make the promises in the contract TEBO WANTED TO ENTER INTO A CONTRACT TO GET HER 13 WEEK SEVERANCE AND SAVE HER JOB SINCE SHE CANT FIND ANOTHER.
- the contract is unconscionable—for example, it is grossly unfair, or THE CONTRACT WAS MORE THAN FAIR AND TEBO RECEIVED ALMOST $10k MORE THAN OTHER MANAGERS FOR DOING A POOR JOB
- the contract is illegal–for example, it enables prostitution, violates tax laws, or requires the destruction of records. NONE OF THE ABOVE APPLIES but we know Stacy with her cohort Pam Tomlinson has destroyed records and tapes for the benefits of two prior mayors.