Glossary
Material Breach
A failure to perform that goes to the essence of an agreement, potentially allowing the other party to terminate.
Also called: fundamental breach
The distinction between a material and a minor breach determines what the wronged party may do next. A material breach may justify terminating the contract and suing for damages. A minor one typically supports a claim for damages while leaving the contract in force.
Courts weigh how much of the expected benefit was lost, whether the defaulting party can be adequately compensated in money, the likelihood that performance will be completed, and whether the failure was in good faith.
The risk is asymmetric. Treating a minor breach as material and walking away can convert the terminating party into the party in breach, which is why the assessment is worth making carefully before acting.
General information about Tennessee law, not legal advice. How this applies depends on the facts of your matter.
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