Is any breach of contract enough to justify suing someone for breach of contract or to stop performing your obligations under the contract because the other side has breached?
Many non-lawyers are surprised to learn that not all breaches of contract in Colorado are treated the same under the law. A breach of contract must usually be determined to be “material” before you can successfully sue someone for breach of contract, and a breach of contract must usually be determined to be “material” before you can rely on that breach to justify your decision to stop performing your obligations under the contract.
When determining whether an act or omission constitutes a material breach of a contract, Colorado courts consider the importance or seriousness of the breach and the likelihood that the complaining party has received or will receive substantial performance under the contract. A party is determined to have substantially performed when the other party has substantially received the expected benefit of the contract. Deviation from contract duties in trifling particulars that do not materially detract from the benefits the obligee would have derived from literal performance does not constitute a material breach Materiality must be assessed in the context of the expectations of the parties at the time the contract was formed. A breach that is material has been said to go to the root of the matter or essence of the contract and renders substantial performance under the contract impossible. In deciding whether a breach is material, the extent to which an injured party would still obtain substantial benefit from the contract, and the adequacy of compensation in damages for the breach, is also considered.
By way of example, a Colorado court determined that a breach was not material when a developer provided a contracted for easement for insertion of water lines even though the easement was not in all places the exact contracted width of 20 feet wide. The Court determined that the width of the easement was generally acceptable to accomplish its purpose. Of course, in determining whether any breach of contract is material, all cases are dependent on their particular facts and on the exact terms of the contract at issue. Thus, it is helpful to consult with an experienced breach of contract attorney before deciding what actions may be appropriate in response to the alleged breach of contract and whether the breach of contract in question in your case is likely to be determined to be material.