Utah General Contractors - Business and Law Practice Exam

A ____________ is when the terms of the contract have been violated to the extent that the contract can no longer be valid.

1. Minor Breach

2. Material Breach

3. Implied Breach

4. Unintentional Breach

The correct answer is: Material Breach

A material breach occurs when the violation of the terms of the contract is so significant that it undermines the contract's foundation, rendering it essentially void or canceled. This type of breach affects the heart of the agreement, making it impossible for the non-breaching party to receive the benefits that were intended from the contract. For example, if a contractor fails to complete a major portion of the work as outlined in the construction contract, this would be considered a material breach since it prevents the other party from receiving the primary benefit of the agreement—having their project completed satisfactorily. In contrast, a minor breach refers to violations that do not significantly affect the contract's overall purpose or intent, allowing the contract to remain valid. An implied breach is not a recognized legal term in the context of contract law and therefore does not apply here. Lastly, unintentional breaches pertain to violations that occur without intent to harm, yet do not change the fundamental nature of the breach itself. Therefore, recognizing the criticality of the breach in relation to the overall contract clarifies why a material breach is distinguished in this context.