Material Fact

From the Latin From Latin 'materialis,' meaning made of matter or substantial..

In one sentence

A fact that significantly affects a party's rights, obligations, or decision-making in a contract.

Plain English

A material fact is information that matters—something that would reasonably influence whether someone enters into a contract or what terms they'd agree to. If someone hides or lies about a material fact, the other party can often cancel the contract or sue for damages. For example, if you're buying a house and the seller knows the foundation is cracked but doesn't tell you, that's a material fact because it affects the property's value and safety. Non-material facts (like the color of the kitchen cabinets) don't give you the right to cancel.

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Example

A used car dealer sells you a car without mentioning that it was in a major accident and rebuilt. The accident history is a material fact because it affects the car's value, safety, and resale potential. You could potentially rescind the sale or sue for misrepresentation.

Used in a sentence

“The court found that the defendant's failure to disclose the material fact constituted fraud.”

Related terms

Misrepresentation

A false statement of fact made to induce someone into a contract.

Unilateral Mistake

An error made by only one party to a contract about a material fact.

Mistake

A misunderstanding or error by one or both parties about a fact in a contract.

Reformation

A court rewrites contract terms to match what both parties actually intended.

Contract of Adhesion

A take-it-or-leave-it agreement where one party has no meaningful chance to negotiate the terms.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.