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Material versus immaterial breaches: What are the differences?

On Behalf of | Dec 27, 2019 | Business Law

If you own a Texas business, you likely spend a good deal of your time negotiating contracts with your employees, your suppliers, your distributors, your customers, etc. It goes without saying that all of these contracts should be in writing so that you will find it easier to successfully sue anyone who fails to live up to his or her contract obligations. 

As FindLaw explains, a contract breach can be either material or immaterial. Since you must prove the amount of damages you suffered in order to win a breach of contract suit, you likely will have success only when you sue for a material breach that results in substantial loss, financial and otherwise, to your business. 


As you might expect, someone can breach one of your contracts in a variety of ways. Whether or not that breach represents a material one, however, depends on the facts and circumstances surrounding it. Suppose, for instance, that you own an electronics store and contract with a supplier to deliver 100 high-end computers to you by next Wednesday. Suppose further that (s)he fails to deliver them until the following Monday. Does this represent a material breach for which you can sue? 

If “next Wednesday” represented a normal business day and you only ordered the computers to replenish your stock, your business likely suffered little or no damages due to the late delivery. Why? Because your current stock likely covered all of your weekend sales. 

If “next Wednesday” represented the day before Thanksgiving, however, the situation changes completely. You needed those computers for your Black Friday sales event and already advertised your “door buster” prices for them, all of which you made perfectly clear to your supplier. His or her failure to deliver on time put your business in the position of losing not only substantial sales when you ran out of computers, but also of losing customer good will. Some of those angry customers will never shop at your store again. Consequently, this material breach of contract resulted in your loss of both current and future sales. 

This is general educational information and not intended to provide legal advice.