If you're confused about that vs. which, don't feel bad. It's one of the most common topics people ask me about, and it all boils down to restrictive clauses.
If you leave off the clause that says which is bad news, it doesn't change the meaning of the rest of the sentence.
A quick and dirty tip (with apologies to Wiccans and Hermione Granger) is to remember that you can throw out the “whiches” and no harm will be done. You use which in nonrestrictive clauses, and if you eliminate a nonrestrictive clause, the meaning of the remaining part of the sentence will be the same as it was before.
On the other hand, if it would change the meaning to throw out the clause, you need a that. Do all cars use hybrid technology? No. So you would say,
"Cars that have hybrid technology get great gas mileage."
Is every leaf green? No. So you would say,
"Leaves that are green contain chlorophyll.
It would change the meaning to throw out the clause in those examples, so you need a that. (Also note that the that clause isn't surrounded by commas. Restrictive clauses usually aren't set off by commas.)
Remembering to use that with restrictive clauses and which with nonrestrictive clauses is the best method, but the quick and dirty tip of using which when you could throw out the clause will also get you to the right answer most of the time.
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