- 289 -
materiality of a breach generally is considered a question of
fact to be decided on the basis of all the facts and
circumstances. See Smith v. Empire Sanitary Dist., supra, and
cases cited therein. In First Interstate Bank v. SBA, supra at
343-344, the Court of Appeals for the Ninth Circuit stated that
the test of whether a breach of a Federal contract is material is
an "all-the-circumstances-test" and that the Court of Appeals
considers the five factors listed under 1 Restatement, supra sec.
241, as significant in applying the test.118
118 1 Restatement, Contracts 2d, sec. 241 (1981), states as
follows:
In determining whether a failure to render or to offer
performance is material, the following circumstances
are significant:
(a) the extent to which the injured party will be
deprived of the benefit which he reasonably expected;
(b) the extent to which the injured party can be
adequately compensated for the part of that benefit of
which he will be deprived;
(c) the extent to which the party failing to
perform or to offer to perform will suffer forfeiture;
(d) the likelihood that the party failing to
perform or to offer to perform will cure his failure,
taking account of all of the circumstances including
any reasonable assurances;
(e) the extent to which the behavior of the party
failing to perform or to offer to perform comports with
standards of good faith and fair dealing.
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