material breach
Definition
A material breach happens when one party in a contract fails to fulfill a significant obligation, so badly that it essentially defeats the whole purpose of the agreement. This is not a minor slip-up but a serious failure that causes real harm to the other party and gives them the right to treat the contract as finished and sue for damages.
Example
You hire a caterer for your company event and pay a $5,000 deposit, but they simply never show up on the day of the event. That no-show is a material breach because it completely destroys what you paid for.
Watch Out
If someone materially breaches a contract with you, you typically must stop performing your own obligations right away, because continuing to work after the breach can sometimes limit your ability to recover damages later.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.