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The determination of "materiality" is a complicated question of fact, involving an inquiry into such matters as whether the breach worked to defeat the bargained-for objective of the parties or caused disproportionate prejudice to the nonbreaching party, whether custom and usage considers such a breach to be material, and whether the allowance of reciprocal non-performance by the non-breaching party will result in his accrual of an unreasonable or unfair advantage. All of these issues must be resolved with reference to the intent of the parties as evidenced in large part by the full circumstances of the transaction, thus making these issues especially unsuited to resolution by summary judgment.
This is an appeal from the district court's order granting partial summary judgment in favor of the defendant-appellee Continental Illinois Bank (the Bank) in an action alleging that the Bank breached its agreement with the plaintiff-appellant's business, Great Lakes and European Lines, Inc. (GLE), by calling a $7 million loan when GLE tendered interest payments less than one day after they were due. On appeal, the plaintiffs argue that the district court erred in granting summary judgment because there existed an array of genuine and material disputed factual issues
Did the district court err in granting summary judgment because there existed an array of genuine and material disputed factual issues?
The court held that the fact that a technical breach had occurred was not sufficient, as a matter of law, to decide the case; the district court was required to determine the "materiality" of the breach before it could hold the Bank not liable for calling the loan. Because GLE raised sufficient fact issues as to whether the breach was "material," summary judgment should not have been granted.