Breach of Contract Defense: Laches
What is Laches?
Laches is a type of equitable defense wherein a plaintiff is prevented from bringing a claim because they delayed too long in filing it. In order for a laches defense to succeed, the defendant must also prove that the plaintiff’s delay in bringing suit resulted in some sort of prejudice or economic injury such as lost profits.
Since it is an equitable defense, laches is only available in claims where the plaintiff is seeking equitable relief such as an injunction or specific performance of the contract. Laches is not available in claims involving money damages. Laches falls into the category of estoppel, which is a legal term meaning that a plaintiff is prevented or “estopped” from bringing suit. The defense is often called “estoppel by laches”.
What is required to prove laches in a contract claim?
Requirements may vary according to jurisdiction, but generally speaking there are two basic requirements to prove laches as a defense to breach of contract:
- The plaintiff unreasonably delayed in seeking a remedy in court, and
- That delay resulted in prejudice to the defendant
A common example of laches is when the plaintiff delays in bringing suit simply because they are waiting for a key witness to pass away. After the death of the witness, the plaintiff then files suit knowing that the defendant’s case is severely limited because they have lost a key witness. In such an instance, a court is likely to find laches in favor of the defendant.
Other examples of prejudice to the defendant include delays which cause significant losses to the defendant, and delays which intentionally prevent a defendant from responding to an offer or acceptance.
In what types of contract claims may the defense of laches be raised?
Laches is available as a defense only when the plaintiff is seeking an equitable remedy rather than monetary damages. In a breach of contract claim, the equitable remedies include:
- Specific performance- the defendant is ordered to perform their responsibilities under the terms of the contract, such as make a delivery or render a payment
- Contract Rescission- the old contract is cancelled and a new one is created
- Contract reformation- the contract is rewritten to clarify mistakes or to reflect newly made agreements
So if the plaintiff brings a suit requesting for any of the above remedies, the defendant may raise the defense of laches if there has been a delay in filing resulting in prejudice to the defendant. They would argue that the plaintiff is not entitled to reformation or specific performance, etc., because of the prejudicial delay.
How is the laches defense different from the statute of limitations for a contract claim?
Laches is similar to issues involving the statute of limitations. The statute of limitations is the time period set by the court in which a plaintiff can file a lawsuit. This can be anywhere from three to fifteen years after the breach of contract depending on the nature of the claim. A plaintiff may not file a lawsuit if the statute of limitations has expired (i.e., they have waited beyond the filing period to bring suit).
The statute of limitations always involves a set deadline for filing, whereas laches claims do not involve any specific time periods. Instead, laches focuses on the fact that the delay resulted in prejudice to the defendant.
Thus, a failure to follow the statute of limitations requirements may result in the claim being barred even if the defendant was not injured by the delay. On the other hand, the defendant must have suffered some sort of wrongdoing before being entitled to raise the defense of laches.
In determining “unreasonable delay” for purposes of laches, a court will often use the statute of limitations as a reference point. For example, they will usually compare the date of filing with the applicable term for filing defined by the statute of limitations for that type of contracts claim. Therefore the two ideas are related to each other but should not be confused when dealing with a breach of contracts issue.
Do I need a lawyer if there is a laches issue in my contracts claim?
Breach of contracts issues can be complex and require the attention of an experienced contracts attorney. If you feel there is a laches issue with your contracts claim, it is important that you contact an attorney. Dealing with laches can be complicated and may result in significant losses for either party. Thus, you should work with an attorney to determine what your particular course of action should be based on your circumstances.
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Last Modified: 05-31-2012 02:56 PM PDT
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