In California civil litigation, a material breach is defined as a substantial failure that goes to the very heart of an agreement. It is a failure of such consequence that it destroys the essential purpose of the contract and effectively deprives the non-breaching party of the “benefit of their bargain.”

According to California law and the CACI 303 jury instructions, courts and juries determine materiality based on several fact-specific factors:

• Extent of Benefit Deprived: Whether the breach significantly robbed the injured party of what they expected to receive.
• Adequacy of Compensation: Whether the injured party can be adequately compensated for the specific loss related to that breach.
• Likelihood of Cure: The probability that the breaching party will fix their failure to perform.

Legal Consequences of a Material Breach

The distinction between a material and minor breach is critical because the legal remedies differ significantly:

1. Discharge of Duties: If a breach is found to be material under CACI 303, the non-breaching party is excused (discharged) from further performance of their own obligations under the contract.
2. Right to Sue: The non-breaching party may suspend their performance and pursue a claim for damages.

In contrast, a minor breach (a failure that does not go to the root of the contract) requires the non-breaching party to continue performing their duties, although they may still sue for any specific monetary losses caused by the minor failure.

• Elements of Breach of Contract California: Essential Legal Guide