12/2/2023 0 Comments Define material breach![]() ![]() ![]() Where the parties intend for a specific event to trigger termination rights, the contract should expressly say so. Fundamentally, as Jackson LJ, giving the principal judgment of the Court of Appeal in probably the leading case on material breach 2 stated, a material breach is more than trivial, but. The risk to the asserting party is its potential liability for wrongful termination and repudiatory breach. This case serves as a reminder for contracting parties to take a multifactorial approach when considering whether material breach is an appropriate trigger for termination rights. RiverRock had already decided on replacing DREAM before its dissolution came to light, it was not in fact concerned by the dissolution. It also did not cause loss to the fund or any of its investors. The breach was the result of a mistake in failing to comply with Companies House requirements and was readily capable of remedy by restoring DREAM to the register. Practical Law may have moderated questions and answers before publication. ![]() On the facts, the court was not satisfied that the breach was material. noun a breach serious enough to destroy the value of the contract and to give a basis for an action for breach of contract see more Cite this entry Style: MLA 'Material breach.' Dictionary,, breach. What constitutes a 'material breach' of contract Practical Law. the consequences of finding the breach not material.the consequences of finding the breach material.the breach in the context of the parties’ agreement.the consequences of the breach for the innocent party.Drawing on previous authorities, the court identified a number of relevant factors in assessing materiality: The question for the court was whether the striking off and dissolution of DREAM constituted a material breach of the consultancy agreement. Whether that breach is material turns on the facts and circumstance surrounding the formation of the contract and is often a matter of degree. RiverRock sued Mr Harnack for repayment of fees paid to DREAM. RiverRock terminated the consultancy agreement on the basis that DREAM had been struck off the Register of Companies and dissolved. A failure to successfully complete a more minor contractual obligation may be referred to as a non-material breach. When difficulties arose in securing investors, RiverRock wanted to replace DREAM. Defined generally by the English High Court as a breach that has a serious effect on the benefit which the innocent party would otherwise derive1, the common denominator in every case analysis is that a material breach must be substantial. Mr Harnack was a fund manager who had guaranteed DREAM’s financial obligations. The investment firm RiverRock appointed DREAM as its consultant for a fund. ![]()
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