Scenario for my tech tran folks: a collaboration agreement includes a termination clause providing that either party may terminate the agreement if the other party breaches a "material" term of the agreement + not cured w/in 30 days. The term "material" is not defined therein. The agreement includes mutual warranties.

If a party breaches any warranty in the agreement, is the the other party automatically entitled to terminate the agreement for breach of a material term?

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So, this is a judgment call. Material usually means pretty fingers important, not that you forgot to disclose you're not in good standing in Ohio.

The right to cure keeps this pretty low risk though. Make sure that 30 days is a reasonable time frame given the reps and warranties that could likely be deemed material.

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A2, no need for your small talk. Provide you op. or not. Doesn't bother me.

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The practical reality of this is… If they can’t cure within 30 days and this is an important contract for the counter party, a judge will decide whether it’s material.

I would tell the business team to try to negotiate their way out on good terms, MAYBE noting that you believe they’ve materially breached the agreement.

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This is the most common provision ever. Every single commercial contract I look at has a term right for material (not defined) breach + 30 day cure period, and usually a term right for the other party’s bankruptcy.

Super market provision. Breach of a mutual rep is likely not material, but depends on the specific rep and the parties involved

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I agree that in practice whether a warranty is material to a contract depends on the warranty and intent of the parties.

Someone recently reminded me of Black's Law definition of "warranty," and it got me thinking of the materiality of warranties. See attached. Thanks for your response.

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