Breach Of Contract

• Published date: 29 August 2023
• Law Firm: Shepherd and Wedderburn LLP
• Author: Carly Duckett

Here we explore types of contract breaches and possible approaches for remedy.

Breaches of contract occur when there is some form of non-performance of a contractual obligation. Before responding to a breach of a contract, an aggrieved party must determine whether the breach is material or immaterial. This will inform how the aggrieved party may respond, and the remedies that are available.

If a breach is material, the aggrieved party can take more severe action than they could if the breach was immaterial. For example, they would be entitled to withhold their performance under the contract until the party in breach has rectified the situation. However, where a breach is immaterial the aggrieved party would not have the right to take this course of action. If they were to do so they could be breaching the contract themselves.

Material Breach v Immaterial Breach

It can be difficult to distinguish material breaches from immaterial breaches. The Inner House has defined a material breach as a breach that goes to the "root of the contract".This is a serious breach that causes a substantial failure under the contract.

Determining whether a material breach has occurred is a question of fact and will depend on the circumstances of each situation. An instance of defective performance may be a material breach, but this will depend on the extent of the defect. Similarly, whether late performance constitutes a material breach will depend on the effect of that delay. Some examples of material breaches include:

• A failure by a landlord to keep a house in tenantable condition under a lease;
• An excessive...