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Contracts • Excuse of Non-Performance
K#125
Legal Definition
Under common law, damages can be recovered for any breach, including a minor breach. However, only a material breach can excuse counter-performance, at which point the non-breaching party may pursue any remedy available. Determining whether a breach is material or not is a question of fact.
Plain English Explanation
When two parties enter into a contract, they are both bound and obligated to perform. However, when one party materially breaches their end of the bargain, the law doesn't require the non-breaching party to fulfill their obligation to perform. Instead, the non-breaching party is excused from performance. The key here, obviously is arguing whether or not a breach is material or not. A minor breach doesn't relieve the party from performing, though it may allow for a delay in performance while the breach is dealt with.
Hypothetical
Hypo 1: Bob wants Sam to cater his birthday party. Sam wants his house painted. Bob promises to paint Sam's house in exchange for Sam promising to cater his birthday. Bob says he will start painting Sam's house on Friday, four days before his birthday. Bob doesn't show up on Saturday. Instead, Bob starts painting on Monday. Result: Because there was no "time is of the essence" clause in their agreement, Bob failing to start on time is a minor breach. This entitles Sam to pursue damages, however, it does not relieve Sam of his obligation to cater Bob's birthday party. Contrast this to a scenario where they had a "time is of the essence" clause in the contract. If that were true, then Bob being late would be a material breach, which may excuse Sam from having to cater Bob's birthday.
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