When evaluating a breach of contract, what is the first step?

In the context of evaluating a breach of contract, the first step typically involves determining whether the breach is material or not. A material breach is significant enough to undermine the contract's purpose, allowing the non-breaching party to pursue legal remedies. If a breach is deemed material, it may justify the non-breaching party in terminating the contract and seeking damages. This assessment is crucial because not all breaches have the same legal consequences; some may be minor, allowing for the performance of the contract to continue, while others may fundamentally disrupt the contractual relationship.

Understanding the distinction between material and non-material breaches is essential to moving forward effectively, whether that means pursuing litigation, negotiating a resolution, or considering other actions. Properly assessing the nature of the breach serves as the foundation for any subsequent steps, such as consulting legal counsel, attempting informal resolution, or initiating legal action, making it vital to start with this evaluation.