A material breach has what effect on performance?

A material breach has what effect on performance?

• A. It excuses the other party from further performance.
• B. It discharges both parties from any future obligations.
• C. It excuses the other party from further performance and allows damages; minor breaches do not discharge the contract.
• D. It requires specific performance by the non-breaching party.

Answer: (C)

A material breach goes to the heart of the contract: it significantly undermines the agreement’s purpose, so the non-breaching party is entitled to treat the contract as terminated and to suspend or stop performing their own duties. At the same time, the breaching party becomes liable for damages caused by the breach. Minor breaches, by contrast, do not terminate the contract—the parties generally must continue to perform, with damages available only for the breach. Specific performance is not the automatic remedy for a material breach; it’s an exceptional equitable remedy and not the usual consequence here.

A material breach goes to the heart of the contract: it significantly undermines the agreement’s purpose, so the non-breaching party is entitled to treat the contract as terminated and to suspend or stop performing their own duties. At the same time, the breaching party becomes liable for damages caused by the breach. Minor breaches, by contrast, do not terminate the contract—the parties generally must continue to perform, with damages available only for the breach. Specific performance is not the automatic remedy for a material breach; it’s an exceptional equitable remedy and not the usual consequence here.