LSDefine
Simple English definitions for legal terms
A quick definition of Material:
Material: Important information that can significantly impact a situation. It can be used in different areas such as law, contracts, and securities fraud. For example, in a court case, a material fact is a crucial piece of information that must be decided by a judge or jury. In contract law, a material breach means that one party failed to meet their obligations significantly enough to warrant a remedy. In securities fraud, any misrepresentation must be significant enough to give rise to liability.
A more thorough explanation:
Definition: Material means important information that is significant enough to determine an issue. It can be used in various contexts:
- Civil Procedure: A general issue of material fact refers to an actual, plausible issue of fact that must be decided by a jury or judge. This issue is relevant and consequential, and it precludes summary judgment.
- Evidence Law: Relevant evidence must be material, meaning it influences the determination of the action and is probative, meaning it has a tendency to make a fact more or less probable. For example, issues affecting a witness’ credibility are generally always relevant and material because if their testimony cannot be believed, then the development of facts will be significantly altered.
- Contract Law: Material refers to an event that significantly impacts the parties’ expectations under the contract. For example, a material breach of contract refers to a court finding that a party failed to satisfy their obligations significantly enough to where the aggrieved party is entitled to a remedy.
- Securities Fraud: Any misrepresentation must be material to give rise to liability. The test for whether a company’s decision not to disclose an event was material is a balance of the probability that the event would have occurred and the magnitude of the event. Qualitative considerations include whether the fact related to a significant aspect of the company’s business, whether it masked a change in earnings or trends, whether it impacted managerial compensation, or whether there was a market reaction to eventual disclosure.
For example, in a contract between two parties, if one party fails to fulfill their obligations significantly enough to where the other party is entitled to a remedy, it is considered a material breach of contract. In securities fraud, if a company fails to disclose an event that would have significantly impacted their business, it is considered a material misrepresentation.
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Material Witness