Material Change In Circumstances

Material Change In Circumstances
Material Change In Circumstances
Quick Summary of Material Change In Circumstances

A material change in circumstances refers to a significant alteration that affects a situation or decision. For instance, if there is a drastic change in someone’s financial situation, it can be considered a material change in circumstances. In legal terms, this can have an impact on court decisions or signed contracts. It is crucial to pay attention to material changes in circumstances as they can greatly influence the outcome of a situation. Material evidence refers to important and relevant information in a case. This evidence can help support or refute a claim or argument. It is essential to present all material evidence in court to ensure a fair and just outcome. A material fact is a significant piece of information that is relevant to a situation or decision. For example, if someone is purchasing a car, the fact that the car has been involved in a major accident would be considered a material fact. It is important to disclose all material facts to ensure that everyone involved has the necessary information to make an informed decision. Material information refers to important and relevant information for an investment decision. This information can impact the price of a stock or other investment. It is crucial for investors to have access to all material information in order to make informed decisions about their investments.

What is the dictionary definition of Material Change In Circumstances?
Dictionary Definition of Material Change In Circumstances

A material change in circumstances refers to a significant alteration in a situation or condition that can have an impact on a legal decision or agreement. This change must be substantial enough to influence the final outcome of the decision or agreement. For instance, during a divorce proceeding, if one spouse loses their job, it constitutes a material change in circumstances that could potentially affect the amount of spousal support granted. Similarly, in a contract for the sale of a house, if the seller discovers that the roof needs replacement, it qualifies as a material change in circumstances that may impact the price of the house. These examples demonstrate how a material change in circumstances can have consequences for legal decisions or agreements. In both scenarios, the change is significant enough to have an effect on the overall situation.

Full Definition Of Material Change In Circumstances

Material Change in Circumstances (MCC) is a significant concept within various areas of law, particularly property law, taxation, and contract law. It refers to substantial alterations in the conditions or facts that were initially present at the time a legal agreement was formed or a decision was made. Such changes can warrant a re-evaluation of the original terms and conditions, as the new circumstances may render the initial agreement or decision unfair, impractical, or obsolete. This overview examines MCC from several legal perspectives, highlighting its implications and applications in British law.

Contract Law

Definition and Significance

In contract law, MCC pertains to a considerable alteration in the facts or circumstances surrounding a contract that could justify its modification or termination. Contracts are predicated on the principle of mutual agreement based on existing conditions at the time of their creation. When these conditions change significantly, the contract may no longer reflect the intentions or capabilities of the parties involved.

Applications in Contractual Agreements

  • Force Majeure Clauses: Many contracts include force majeure clauses that specify events considered outside the control of the parties, which, if they occur, may excuse performance. These events often encompass natural disasters, wars, and significant legislative changes. When a force majeure event occurs, it constitutes an MCC, potentially allowing one or both parties to suspend or terminate their obligations without penalty.
  • Frustration of Contract: Under British law, the doctrine of frustration applies when an unforeseen event fundamentally changes the nature of the contract, making it impossible to fulfil. For instance, if a venue for an event burns down before the event takes place, the contract for hiring the venue is frustrated. The legal threshold for frustration is high; the change must be so substantial that it renders the contract’s performance radically different from what was agreed upon.
  • Hardship Clauses: Some contracts contain hardship clauses, which provide mechanisms for renegotiation if continued performance becomes excessively burdensome due to an MCC. Unlike force majeure, hardship does not render performance impossible but significantly alters the balance of obligations, necessitating adjustments to restore fairness.

Case Law

A landmark case illustrating MCC in contract law is Taylor v. Caldwell (1863), where a music hall was destroyed by fire before a series of concerts could be held. The court held that the contract was frustrated, as the destruction of the hall constituted an MCC, releasing both parties from their obligations.

Property Law

Definition and Significance

In property law, MCC can influence decisions on property assessments, planning permissions, and lease agreements. Changes in circumstances might include alterations in the property’s condition, changes in local infrastructure, or shifts in market dynamics.

Applications in Property Law

  • Planning Permissions: When applying for planning permissions, authorities may consider MCC in their evaluations. For instance, a significant increase in traffic volume or the construction of new infrastructure may affect the decision on whether to grant or modify planning permissions.
  • Lease Agreements: In leasing, an MCC might include substantial changes to the property’s condition or the surrounding area. If a leased property becomes uninhabitable due to an unforeseen event, such as severe structural damage, tenants might seek a rent reduction or lease termination based on the MCC.
  • Property Assessments and Valuations: Valuations for taxation or sale purposes often consider MCC. A dramatic change in the property’s condition or local real estate market can significantly impact its assessed value. For example, a property that suffers flood damage may see a substantial reduction in its market value.

Case Law

The case of Cricklewood Property and Investment Trust Ltd v. Leighton’s Investment Trust Ltd (1945) explored MCC in lease agreements. Here, the tenant argued that World War II regulations, which restricted building activities, constituted an MCC that should relieve them from lease obligations. The court found that while the regulations imposed severe limitations, they did not completely frustrate the contract, demonstrating the high threshold for invoking MCC.

Taxation Law

Definitions and Significance

In the realm of taxation, MCC refers to substantial changes in the taxpayer’s financial situation or the economic environment which may warrant reassessment of tax liabilities. This concept ensures that tax assessments remain fair and reflective of the current circumstances.

Application in Taxation Law

  • Property Tax Assessments: Local authorities regularly reassess property values for tax purposes. MCC such as natural disasters, major renovations, or significant market shifts can lead to reevaluation. For example, a property that undergoes extensive refurbishment might see an increased assessed value, affecting its tax liabilities.
  • Income Tax Adjustments: Significant changes in an individual’s financial circumstances, such as loss of employment, inheritance, or significant medical expenses, can influence their tax obligations. Tax authorities may adjust assessments and provide reliefs or exemptions based on these changes.
  • Business Taxation: For businesses, MCC might include substantial alterations in revenue streams, changes in ownership, or significant capital investments. Tax assessments must account for these changes to ensure that the tax burden is equitable and reflective of the current business environment.

Case Law

In IRC v. Duke of Westminster (1936), the House of Lords considered the tax implications of changing financial circumstances. While the case primarily dealt with the legality of tax avoidance schemes, it highlighted the importance of aligning tax assessments with the taxpayer’s actual financial situation, illustrating the broader principle of MCC in taxation.

Employment Law

Definition and Significance

In employment law, MCC often pertains to significant changes in an employee’s work conditions or the employer’s operational circumstances, which can affect employment contracts and workplace policies. This concept ensures that employment agreements remain fair and relevant in light of evolving circumstances.

Application in Employment Law

  • Redundancies and Restructuring: Employers may need to implement redundancies or restructuring due to MCC such as economic downturns, technological advancements, or significant shifts in market demand. In such cases, employers must follow legal procedures to ensure fair treatment of affected employees, including consultation and appropriate compensation.
  • Contractual Modifications: Substantial changes in job roles, working conditions, or company policies may necessitate modifications to employment contracts. For instance, if a company relocates its operations, employees may need new contracts reflecting the change in work location.
  • Health and Safety Regulations: Changes in health and safety regulations or the emergence of new risks (e.g., during a pandemic) can constitute MCC, prompting employers to update workplace policies and procedures to ensure compliance and employee safety.

Case Law

The case of Wilson v. Secretary of State for Employment (1995) dealt with MCC in the context of redundancy. The House of Lords ruled that significant changes in the employer’s operational circumstances, such as a decline in business, could justify redundancies, provided that the employer followed fair procedures and provided appropriate compensation.

Family Law

Definition and Significance

In family law, MCC often refers to significant alterations in the financial or living circumstances of individuals, particularly in the context of divorce settlements, child custody arrangements, and maintenance orders. These changes can necessitate modifications to legal agreements to ensure fairness and the well-being of all parties involved.

Application in Family Law

  • Child Custody and Support: Significant changes in a parent’s financial situation, employment status, or living arrangements can impact child custody and support agreements. Courts may modify existing arrangements to reflect the new circumstances and ensure the best interests of the child.
  • Spousal Maintenance: Alterations in the financial circumstances of either spouse, such as a substantial increase or decrease in income, can warrant adjustments to spousal maintenance orders. The courts aim to ensure that maintenance arrangements remain fair and adequate.
  • Divorce Settlements: Major changes in the value of assets or the financial status of either party can affect divorce settlements. For example, if one party experiences a significant increase in wealth post-divorce, the other party might seek a modification of the settlement terms.

Case Law

In Prest v. Petrodel Resources Ltd. (2013), the Supreme Court considered the impact of MCC on financial settlements in divorce cases. The court held that substantial changes in the financial circumstances of the parties, particularly involving the concealment or dissipation of assets, could justify revisiting and modifying the original settlement to ensure fairness.


Material change in circumstances is a vital legal concept across various domains, ensuring that legal agreements, assessments, and decisions remain fair and reflective of current realities. In contract law, it can justify the modification or termination of agreements. In property law, it influences planning permissions and property valuations. In taxation, it ensures that tax assessments align with the taxpayer’s financial situation. In employment law, it governs redundancies and contractual modifications, while in family law, it affects custody arrangements and maintenance orders.

Understanding the implications and applications of MCC is crucial for legal practitioners and parties involved in legal agreements, as it provides mechanisms for addressing significant changes that could render initial terms unfair or impractical. The courts carefully evaluate MCC claims, maintaining a high threshold to ensure that only substantial and unforeseen changes warrant legal adjustments. This balance ensures the stability of legal agreements while allowing flexibility to address genuinely transformative changes in circumstances.

Material Change In Circumstances FAQ'S

A material change in circumstances refers to a significant change in a person’s life that affects their ability to fulfil their legal obligations or responsibilities.

Examples of material changes in circumstances include job loss, illness, disability, relocation, and changes in financial circumstances.

A material change in circumstances can lead to a modification of legal agreements or court orders, such as child custody, child support, spousal support, or property division.

The process for requesting a modification varies depending on the type of legal agreement or court order. Generally, the requesting party must file a motion with the court and provide evidence of the material change in circumstances.

The court considers various factors, such as the nature and extent of the change, the impact on the parties and any children involved, and whether the change is temporary or permanent.

Yes, a material change in circumstances can be used as a defence in certain legal disputes, such as breach of contract or non-payment of support.

In some cases, a material change in circumstances can be predicted or prevented through careful planning and preparation. For example, parties can include provisions in their legal agreements that address potential changes in circumstances.

If a party fails to disclose a material change in circumstances, they may be subject to legal consequences, such as a court order to pay damages or a modification of the original agreement.

Yes, a material change in circumstances can affect immigration status, particularly if it involves a change in employment or financial circumstances.

A lawyer can provide legal advice and representation in matters related to a material change in circumstances, such as filing a motion for modification or defending against a breach of contract claim.

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This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 7th June 2024.

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