Materiality

In one sentence

Whether a fact or breach is important enough to affect the contract's core purpose or value.

Plain English

Materiality asks whether something matters enough to change the deal. If a party breaches a material term—one that goes to the heart of the contract—the other party can usually cancel or sue for damages. But if the breach is immaterial (minor or trivial), the injured party might only get a small payment rather than the right to walk away. For example, if you're buying a house and the seller promised to repaint the kitchen blue but paints it green, that's probably immaterial; but if the roof leaks and the seller hid that fact, that's material because it affects the house's value and safety.

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Example

A contractor agrees to build a deck and promises the wood will be pressure-treated. He uses untreated wood instead, which will rot quickly. This is a material breach because the quality of the wood directly affects how long the deck will last.

Used in a sentence

“The court decided the seller's failure to disclose the water damage was a material breach of the contract.”

Related terms

Mistake

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

Conditions Precedent

An event that must happen before a party's obligation under a contract kicks in.

Conditions Subsequent

An event that, if it happens, ends a party's obligation or allows them to cancel the contract.

Implied Covenant of Good Faith and Fair Dealing

An unwritten promise in every contract that parties will act honestly and fairly toward each other.

Damages

Money awarded by a court to compensate a party for losses caused by a breach or wrongdoing.

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.