A Day Late and a Dollar Short, But Does it Really Matter in Contract Law?
We all understand the basics of how a contract is made. In contract law You promise to give up something to receive something else in return. For example, you tell the neighbor boy that you will pay him if he waters your lawn on Tuesday and Thursday while you are out of town for a week, and he agrees to do the watering. The neighbor boy and you are now parties to a contract. Simple enough. But what if you come home a few days later to find that he did the watering on Wednesday and Friday. Although the lawn did not suffer, if you were a particularly ornery neighbor, you might say to him that he did not fulfill his part of the contract (that is, he breached the contract), and so you do not feel like you should pay him. Would you be legally justified in withholding his payment because he watered on the wrong days?
On a larger scale, these are the kinds of issues that sometimes arise in legal disputes over contracts. In some cases, when one party fails to fulfill his side of the contract, the other side does not have to fulfill their part. However, a mere technical breach by a party may not be sufficient for that party to lose his right to receive payment. Rather, the law generally requires that the breach be “material” or significant. Where a breach is not material, the law might still require the non-breaching party to perform. In determining whether a breach is “material,” courts will consider various factors, such as:
- the extent to which the non-breaching party will be deprived of the benefit she expected from the contract,
- the actual loss to the non-breaching party,
- the likelihood that the breaching party can or will cure (correct) the breach, and
- whether the breaching party acted in good faith.
Looking at these and other factors, a court may well determine that a breach is not sufficiently material to warrant a legal remedy to the non-breaching party.
Going back to our example, you will probably have to still pay the neighbor boy. He did not do exactly what he said he would do but, assuming his failure did not result in any real loss to you, he is still entitled to his full payment.
If you are in a situation where you are not sure whether a breach is material, you may want to discuss the matter with an experienced contract attorney to determine what rights you have. We would be happy to meet with you to discuss your case. We can be reached at at (480) 833-1113.