What term is used to describe when the contractual terms have been violated to the point that the contract is no longer valid?

The term that describes a situation where the contractual terms have been violated to the point that the contract is no longer valid is "material breach." A material breach occurs when one party fails to perform their duties as outlined in the contract, significantly undermining the contract's purpose. This kind of breach allows the non-breaching party to terminate the contract and seek damages, as the essence of the agreement has been fundamentally compromised.

In contrast, terms like "liquidation" refer to the process of closing a business and selling its assets, rather than the status of a contract. "Material misrepresentation" involves providing false information that induces a party to enter into a contract but does not address the contract's validity after execution. "Immaterial breach" refers to a violation that does not significantly affect the contract's overall purpose, meaning the contract remains valid despite minor issues. Therefore, "material breach" is the most accurate term for the situation described, as it directly indicates a breach significant enough to nullify the contract's validity.