As a business owner, you have no doubt entered into several contracts with your partners, clients, contractors and other parties. Usually, these contracts ensure that everything runs smoothly for everyone involved. Sometimes, though, this doesn’t work out. Perhaps one of the signatories violates the terms of the contract by failing to hold up its end of the bargain. In this case, you have a breach of contract.
Breaches of contract can be huge legal headaches. Sometimes it is even necessary to go to court. But understanding a few common defenses for breach of contract can help you anticipate your opponent’s behavior in court.
The most straightforward defense to claim a mistake. A defendant may try to show that both parties were mistaken about a substantive contractual matter. This wouldn’t be enough to nullify a contract, but it may be enough evidence to craft a successful defense to breach of contract.
Statute of limitations
Sometimes, a state’s statute of limitations could preclude a breach of contract suit from being heard in court. The suit could be thrown out or circumvented entirely if the defendant can show that the statute of limitations has expired.
A fraud defense argues that the contract is unenforceable and invalid because material facts of it are fraudulent. The defendant essentially claims that the plaintiff has either misrepresented or failed to disclose an important aspect of the contract. If the defendant uses this technique, their attorney must demonstrate to the court that the fraud was intentional.
Duress occurs when one party uses physical force, intimidation or other threats to get the other party to sign the contract. Contracts that have been signed under duress can be invalidated, since one party was essentially coerced into signing against their will. Proving duress in court is typically very difficult, but not unheard of.
Comparable to duress, undue influence is when one signatory has a significant level of power over the other and uses it to make them sign a contract. This defense is sometimes used alongside duress, since these claims both involve coercing a signatory into entering a contract.