Under the common-law rule for contracts for services, a material breach allows the nonbreaching party to withhold its own performance. A breach is material when the nonbreaching party does not receive the substantial benefit of its bargain. Substantial performance does not usually qualify as a material breach. A contractor sells 100 refrigeration units; the contract is FOB destination. The store seeks damages for breach of contract. The strongest defense is due to the 30-day leeway per industry practice, unless the contract forbids it.

• A. The contract allows a 30-day leeway for delivery unless prohibited by the contract.
• B. The breach was immaterial because the store suffered no substantial harm.
• C. Trade usage does not apply to this case.
• D. A valid breach exists regardless of industry practice.

Answer: (A)

In contracts for services, a breach is material if the nonbreaching party does not receive the substantial benefit of its bargain. If performance is substantially within the expected scope and timing, minor deviations—such as a delivery delay within an established grace period—often aren’t treated as material breaches. Industry practice can supply a permissible leeway for timing, and if the contract does not forbid that leeway, such a delay may still satisfy the bargain.

Here, delivery is FOB destination, and the industry practice provides a 30-day grace for delivery unless the contract forbids it. If the refrigeration units were delivered within that 30-day window, the purchaser still obtained the substantial benefit of the contract, so the breach would not be material. This makes the strongest defense that the contract authorizes a 30-day leeway for delivery, barring any prohibition in the agreement.

The other options don’t fit as well: claiming immaterial breach solely because no substantial harm ignores the explicit industry leeway; insisting that trade usage doesn’t apply is incorrect because trade usage can govern timing when the contract is silent or ambiguous; asserting a valid breach exists regardless of industry practice conflicts with the recognized leeway that may apply under the contract and customary practice.