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Material Breach: Definition, Example and Related Terms

What is a Material Breach ?

A material breach is a serious problem with a contract that affects the very heart of the agreement. In other words, it's when one party fails to do something so important that it makes the contract worthless to the other party. For example, if you order a bicycle and the company sends you a pair of roller skates instead, that's a material breach. You didn't get what you paid for, so the contract isn't worth anything to you anymore.


  • Scenario Description
    A company hires a software development agency to create a custom software program. The contract specifies that the program must be completed and delivered by a certain date. If the agency fails to deliver the program by the agreed date, this could be a material breach of contract. The company hired the agency for the specific purpose of having the software ready by a certain time. If the software is late, the company might not be able to use it as intended, which could cause serious harm to the company's business.
    A business enters into a contract with a supplier to provide a certain quantity of goods every month. If the supplier repeatedly fails to deliver the agreed quantity, or delivers goods of inferior quality, this could constitute a material breach. The business relies on the goods to operate, and if they're not provided as agreed, the business could suffer significant losses.