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Contract Termination, First Material Breach of Contract

Contracts sometimes include provisions allowing one party to terminate a contract if the other party is not living up to its end of the bargain. The termination provision usually allows the party to cancel without further liability if certain circumstances exist (e.g., the goods/services being provided do not meet certain standards or are otherwise insufficient). In breach of contract suits, contract termination is an affirmative defense which can potentially defeat a claim in its entirety. Beuc v. Morrissey, 463 S.W.2d 851 (Mo. 1971). What this means is that if a plaintiff sues for breach of contract, a defendant may have a viable defense if the defendant can prove that it acted within its contractual rights to terminate the contract, thereby cutting off any claim of liability. 

A separate, related affirmative defense to a breach of contract suit is first material breach of contract. A plaintiff cannot sue on a contract if it first materially breached the agreement. A “material breach” is when the breach relates to a vital provision of the agreement. Guidry v. Charter Communications, Inc., 269 S.W.3d 520 (Mo. Ct. App. 2008). In practice, and when warranted, it is common to see these two defenses argued together and separately.