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When One Party's Contract Breach Excuses The Other's

Tuesday, June 05, 2012 02:57 am


All contract breaches are not created equal. Only a material breach renders the contract unenforceable. It matters who breached first--and how substantially.

5 factors of a material breach

There are five factors a court will consider when determining if a failure to perform under a contract is material: The extent to which the injured party (1) will be deprived of an expected benefit and (2) can be adequately compensated for the deprivation; (3) the extent to which the breaching party will suffer forfeiture; (4) the likelihood that the breaching party will cure its failure; and (5) the extent to which the breaching party's behavior is fair and in good faith. See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004) (quoting Restatement (Second) of Contracts 241 (1981)).

In 1.9 Little York Ltd. v. Allice Trading Inc., 2012 Tex. App. Lexis 2112 (March 15, 2012), each party alleged that the other had breached the contract on a warehouse construction project. According to the contractor/owner, the sub walked off the job, leaving a detention pond inco [...]

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