Editing Breach of contract (section)

==Types of breach==
Contracts often use wording other than ''repudiatory breach'' to describe a type of breach of contract. These contractual terms include ''material breach'', ''fundamental breach'', ''substantial breach'', ''serious breach''. These alternative wordings have no fixed meaning in law but are interpreted within the context of the contract that they are used. For that reason, the meaning of the different terms varies from case to case. Possible interpretations of their meaning include "repudiatory breach", and "serious breach, but not as serious as a repudiatory breach".

===Trivial breach===
A ''trivial breach'' is one that does not meet the standard for designation as a material, serious or substantial breach.

An [[Arizona Supreme Court]] decision in a 1990 commercial [[retail leasing|retail lease]] case noted that "the overwhelming majority of [US] jurisdictions... hold the landlord's right to terminate is not unlimited. We believe a court's decision to permit termination must be tempered by notions of equity and common sense. We thus hold a forfeiture for a trivial or immaterial breach of a commercial lease should not be enforced."<ref>Supreme Court of Arizona, [https://law.justia.com/cases/arizona/supreme-court/1990/cv-89-0010-pr-2.html Foundation Dev. Corp. v. Loehmann's], 163 Ariz. 438 (1990), accessed 25 January 2021</ref>

In Rice (t/a The Garden Guardian) v [[Great Yarmouth Borough Council]] (2000),<ref>All ER (D) 902, CA</ref> the UK Court of Appeal decided that a clause which provided that the contract could be terminated "if the contractor commits a breach of any of its obligations under the contract" should not be given its [[literal meaning]]: it was considered "contrary to business common sense" to allow any breach at all, however trivial, to create grounds for termination.<ref name=winser>Winser, C., ''Terminating a Commercial Contract for Material Breach'', Crown Office Chambers, June 2007</ref>

===Material breach===
A ''material breach'' has been held to mean "a breach of contract which is more than trivial, but need not be repudiatory" and confirmed as meaning "a breach which is substantial. The breach must be a serious matter, rather than a matter of little consequence."<ref>[[Rupert Jackson|Jackson LJ]], in England and Wales Court of Appeal (Civil Division), [https://www.bailii.org/ew/cases/EWCA/Civ/2013/200.html Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (t/a Medirest) (2013)], EWCA Civ 200, paragraph 126.</ref> A breach of contract will likely constitute a material breach if the term of the contract which has been breached is a '''condition''' of the contract. A variety of tests may be applied to terms of contracts to decide whether a term is a warranty or a condition of the contract.

In respect to the EPC Agreements,{{what|date=June 2021}} material breach is defined as "shall mean a breach by either Party of any of its obligations under this Agreement which has or is likely to have a Material Adverse Effect on the Project and which such Party shall have failed to cure".{{cn|date=June 2021}}

Other UK cases which relate to the concept of a material breach include:
*[[National Power|National Power plc]] v United Gas Company Ltd. (1998),<ref>All ER(D) 321</ref> where Colman J considered wording relating to "a material breach of any of [the guilty party's] obligations", allowing termination of the contract if remedy of such breach had not been commenced within seven days. The judge ruled that recognition that a material breach might be remedied distinguished the concept from a repudiatory breach, and there was no commercial sense in a clause restricting the common law rights of the innocent party, in relation to a repudiatory breach, and therefore "material breach" must refer to a form of breach which is not repudiatory.<ref name=winser /> 
*Glolite Ltd. v Jasper Conran Ltd. (1998), where [[David Neuberger, Baron Neuberger of Abbotsbury|Neuberger J]] stated that {{quote|Whether a breach of an agreement is "material" must depend upon all the facts of the particular case, including the terms and duration of the agreement in question, the nature of the breach, and the consequences of the breach.<ref name=dalk>Quoted by Clarke J in England and Wales High Court (Commercial Court), [https://www.bailii.org/ew/cases/EWHC/Comm/2006/63.html Dalkia Utilities Services Plc v Celtech International Ltd (2006)], EWHC 63 (Comm) (27 January 2006)</ref>}} and that{{quote|when judging what the parties meant when they referred to a breach having to be "material" and "remediable" (''sic'') it seems to me that they must have had in mind, at least to some extent, the commercial consequences of the breach.<ref name=dalk />}}
*Phoenix Media Limited v Cobweb Information (2000) <ref>Unreported, 16 May 2000</ref>
*[[Dalkia]] Utilities Services plc v Celtech International (2006) noted that assessing "materiality" involved looking at the actual breaches, their consequences, [the guilty party's] explanation for the breaches, their context within the agreement, the consequences of holding the agreement determined and the consequences of allowing the agreement to continue.<ref>1 Lloyds Rep 599</ref> Financial difficulties experienced by Celtech meant that they missed three payments out of 174 due over the 15 year life of the contract. These represented 8.5% of the total contract sum and were therefore not trivial or minimal, but Celtech were making attempts to pay and therefore not in repudiatory breach. Celtech were, however, in material breach of the contract and the contractual right to terminate could therefore be exercised by Dalkia.<ref name=winser />
*[[Gallaher Group|Gallaher International Ltd]] v Tlias Enterprises (2008) <ref>England and Wales High Court (Commercial Court), [https://www.bailii.org/ew/cases/EWHC/Comm/2008/804.html Gallaher International Ltd v Tlais Enterprises Ltd (Rev 1) (2008)], EWHC 804 (Comm) (18 April 2008), accessed 15 June 2021</ref>
*Crosstown Music Company v Rive Droite Music Ltd (2009), also making the point that a "material" breach was more significant than a "trivial" breach.<ref name=cm>England and Wales High Court (Chancery Division), [https://www.bailii.org/ew/cases/EWHC/Ch/2009/600.html Crosstown Music Company 1, Llc v Rive Droite Music Ltd & Ors (2009)], EWHC 600 (Ch) (25 March 2009), accessed 15 June 2021</ref> [[Anthony Mann (judge)|Mann J]] referred to the ''Dalkia'' and ''Gallaher'' cases in his speech.<ref name=cm />{{rp|para. 98}}