Contracts are often a major component in keeping a business in Los Angeles operational. For example, those in Hollywood who work in the entertainment industry or those who engage in real estate dealings in Beverly Hills may regularly enter into contracts.
Unfortunately, sometimes one party to the contract does not meet their obligations under the contract. When this happens, the nonbreaching party may choose to pursue litigation. If so, it is important to understand whether the situation constitutes a material breach of contract or minor breach of contract.
What is a material breach of contract?
A material breach of contract exists when the non-breaching party receives something substantially different from what was agreed upon in the contract. For example, if a party entered a contract to purchase 100 T-shirts and they receive 100 pairs of pants, this may constitute a material breach of contract.
If a material breach of contract exists, the non-breaching party may be excused from performing their obligations under the contract and may be able to seek all appropriate remedies for the breach.
What is a minor breach of contract?
A minor breach of contract exists if, even though the breaching party did not fulfill their end of the bargain, the non-breaching still received the agreed-upon goods or services. For example, if a contract does not contain firm deadlines, a reasonable delay may constitute a minor breach of contract.
If a minor breach of contract exists, the non-breaching still has to fulfill their end of the agreement. However, they can seek compensation for any damages suffered due to the breach.
Learn more about business litigation
It is important to understand the nature of the breach, so you can understand your rights and obligations. Seeking legal counsel from an experienced attorney can help those with questions about business litigation chart the best path forward.