What is a breach of contract?

If you are like most Georgians, you have entered into many contracts so far in your life. Some were more important than others. Some were in writing; others were verbal. Some called themselves contracts; some called themselves something else such as your mortgage, your car loan, your agreement with your internet and/or cellphone provider, your order confirmation from an online vendor, etc. If you are married, your marriage license is a contract between you and your spouse.

A contract requires a minimum of two parties, each of whom expects to benefit from it in some way and each of whom agrees to do certain things to fulfill his or her end of the bargain. As FindLaw explains, if one party fails to do so, (s)he is said to have committed a breach of the contract

Material versus immaterial breach

Breaches come in two types: material and immaterial. As their names imply, a material breach is a serious one. An immaterial breach is less serious and usually does not make that much difference to the overall performance of the contract. Often what differentiates an immaterial breach from a material one are the terms of the contract itself.

For instance, suppose you order a set of expensive glassware from an online merchant whose advertising says that all “standard shipping rate” orders are delivered within 7-10 days. Since the glassware is for your personal use and its arrival date has no particular urgency, you choose standard shipping. Your glassware, however, does not arrive for three weeks. While you undoubtedly feel irritated, you are not actually damaged by the glassware’s late arrival and the merchant has not materially breached the sales contract.

Now let us suppose that you order the glassware as a special birthday gift for your mother whose birthday is five days from today. Knowing that time is running out, you choose the most expensive shipping method. The advertising says that items shipped this way will arrive in three days. Now you have a “time is of the essence” situation. If the glassware does not arrive when promised and consequently you cannot present your mother with her special birthday gift, the merchant has materially breached the contract, you are irreparably damaged, and you may be entitled to get your money back and keep the glassware as well.

This information is educational in nature and should not be interpreted as legal advice.

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