Arthur R. Lehman, L.L.C.

When is breach of contract a "material breach"?

New York businesspeople rely on their customers, clients and vendors to keep their promises or to renegotiate agreements if the current ones are not working out. These promises and agreements are called contracts, and our legal system recognizes the importance of these contracts and the importance of the parties adhering to them. When at least one contract term has been violated by a party, the contract is said to have been breached. But, how do courts respond to contract breaches?

If one party performs a duty under a contract but performs it later than it is supposed to, the contract has probably been breached. Can the other party recover damages as a result of this breach of contract? It depends. Let's say a construction supplier is supposed to provide materials to a contractor by close of business on a Wednesday. The materials are instead provided on Thursday morning. Unless the contractor can show that it suffered monetary loss as a result of the breach, the breach will probably be considered immaterial, and the contractor probably won't be able to recover damages.

If the contractor needs the materials at a certain time, it can negotiate a contract term indicating that time is of the essence. Now, if the materials are delivered too late, the contractor has a better case that the breach was material and that damages should be recovered.

A contract dispute can greatly affect the business of a New York company. Contract disputes can be resolved in a number of different ways, including negotiation and litigation.

Post Type: Q&A

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