This is one of a series of articles in which we have
reviewed the judicial interpretation of some words and phrases that
are commonly used in contracts. In this article we look at the
meaning of the phrase "material
breach".
Context
The parties to a contract often have an express right to
terminate in the event of a "material breach" by the
other1.
What is a "material breach"?
Forklift Engineering Australia Pty Ltd v Powerlift (Nissan) Pty
Ltd2
Forklift Engineering Australia Pty Ltd
(Forklift) was a dealer of Powerlift (Nissan) Pty
Ltd (Powerlift) products. The dealer agreement
contained a provision which entitled either party to terminate the
agreement if the other party commits a "material breach"
of the agreement, which is either not capable of being remedied or
is not remedied within 14 days of being required to do so.
Powerlift sought to activate this provision for Forklift's
failure to pay invoices and provide information.
