Who decides if a breach is material or non-material?
Ultimately, this is decided by a judge or a jury or an arbitrator if the parties to the contract cannot resolve the question.
Should a contract state in itself which provisions not being followed
count as a material breach, and which don't?
This is often done. Typically case law also supplies guidance.
If this were the case why wouldn't the contract writer just include
everything as a material breach, just because no one would sign that?
It isn't uncommon for a contract to state that every violation is a breach.
One of the most common cases where not every breach is considered to be a material breach is for a contract to provide that if X, Y or Z provisions of the contract (even the duty to make a payment of rent or something like that by a given deadline) is breached, that there is either a grace period before the breach becomes material, or there is a requirement that the other party given notice of the alleged breach in writing and provide a certain amount of time to cure the breach.
The notion is that you would prefer people to have an opportunity to cure inadvertent or minor breaches, rather than ending a generally mutually beneficial contractual relationship, and as long as breaches are ultimately cured, it is better to keep the contractual relationship in force.
Another common case where you draft a contract with provisions that aren't a material breach involves deadlines associated with a project, such as a software commission or a construction contract or a contract to film a movie. These presumed to be immaterial unless there is a "time is of the essence" provision in the contract.
This is done because the practical reality is that nobody in the marketplace that you could hire in most cases will meet every deadline in a complex project. Shit happens and deadlines need to be adjusted all the time. This is par for the course. The goal is to finish the project, and if your contract works from the assumption that a missed deadline means that the contract is breached and you sue each other, nobody is ever going to finish the project and getting replacement contractors to hire on after repeated firings of past contractors becomes increasingly difficult.
Instead, one can create other incentives for getting the project done within a reasonable time, such as bonuses for meeting certain deadlines, or withholding payment until work is done.
I also frequently draft contracts that provide that a breach of a notice provision is not a material breach if the party entitled to notice obtains actual notice and is not prejudiced by the lack of notice.
This is a follow up to this question, when is it necessary to include
in a contract that the provisions will be enforced to the extent
permissible by law. For example where I live a landlord can't charge
more than $50 for late payments or bounced checks. But if an addendum
says a fee of $75 for bounced cheques will be charged, and it doesn't
contain "this will be enforced to the fullest extent permitted by law"
then this would be an invalid clause but I don't think it would
invalidate the entire agreement?
The point is a "will be enforced to the fullest extent of the law" clause is to try to avoid a fight at trial over whether the law violating provision is so central to the contract that the essence of the agreement is compromised without it, in which case invalidating the entire agreement would make more sense, or whether it is a detail that the agreement can function without. In other words, is the illegal provision a central part of the bargain?
This provision expresses a desire to save the contract in an area where the illegal provisions are unlikely to be central to the deal between the parties, but the result would usually be the same without it. (The focus there is really on discouraging class action suits seeking windfall results.)
But, suppose that the State of Mississippi adopted a law prohibiting the imposition of non-default interest on money loaned which was upheld as constitutional somehow. In that situation, where the invalidity goes to the core of the loan agreement between the parties, invalidating the entire loan transaction via rescission, rather than invaliding the interest charge while keeping the rest of the contract in force, would probably make more sense.