Defenses to Breach of Contract
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Defenses to Breach of Contract
A breach of contract can be excused when the contract is found to be void. There are many grounds for voiding a contract, and you should consult an attorney to determine if any of them are applicable to your case.
In order to form a contract, there must be:
- An offer – a party must offer to make an agreement
- Acceptance of the offer – Usually the acceptance must be express, but implied acceptance may be found in certain cases
- Intent – If one party did not intend to make an exchange, the transaction may be treated as a gift
- Consideration – Exchange of valued goods or services
If one of these elements are lacking, then there is no enforceable contract because there is no contract.
1. The Contract Is Not In Writing
Most contracts can be made orally, but there are certain agreements which must be in writing. The statute of frauds, the law which requires contracts be in writing, states that the following contracts must be in writing. If the contract deals with one of these areas and is not in writing, then it is legally unenforceable:
- Contracts involving the sale or transfer of land
- Promises to pay someone’s debt obligations
- Contracts that cannot be completed within one year of their making, according to the terms of the contract
- Contracts involving the sale of goods for more than $500
- Contracts that will go beyond the lifetime of the one performing the contract
2. The Contract Is Not the Agreement I Consented To
In a few situations, the contract may not reflect the true intentions of the parties. In those situations, a party may show that other agreements were made outside the contract, agreements which change the nature of the agreement and thus puts the defendant within the terms intended by the parties.
This defense will work well if the contract does not contain a merger clause.
3. One Party Was a Minor
In general, minors cannot enter into contracts. In most states, someone is a minor if he or she is under 18, though there may be variations. Therefore, if a minor signs a contract but later wants to get out of it, he or she can usually do so. For this reason, it is a good idea to have the minor’s parents sign the agreement if you don’t want it voided in the future.
3. Mental Capacity
A contract can be unenforceable if a person lacked mental capacity entering into it. Determination of mental capacity will vary from state to state. Sometimes, courts will look at whether or not the person understood what he or she was doing at the time of contract creation. Other courts will look at whether or not the person had control over their actions at the time of contract creation.
4. Duress or Undue Influence
Duress occurs when a person is influenced to sign a contract under pressure. Undue Influence occurs when a dominant party exerts excessive pressure on a weaker party to sign a contract.
5. There Is a Mistake in Creating the Contract
A mistake occurs when parties have a mistaken belief about a fact upon entering into a contract. If only one party is mistaken, it is a unilateral mistake, and generally contract performance is not excused. In a bilateral mistake situation, both parties are mistaken, and the contract will generally be void.
The unilateral mistake rule does not apply if one party misleads the other party. Unilateral mistakes can also void a contract if one side fails to disclose information which is only known to that party and which a reasonable person could not discover on their own.
6. The Contract Has an Illegal Purpose, or Violates Public Policy
If the terms of the contract run counter to public policy or existing law, the contract will be unenforceable. For example, a court will not enforce a contract for the sale of illegal firearms
7. The Contract Is Unconscionable
A contract is void if it is unconscionable. "Unconscionable" means that the contract is very obviously one-sided, so one-sided that no reasonable person would agree to such terms. Therefore, the court will assume that one part was pressured into signing the contract since no reasonable person would otherwise.
When something happens that makes it impossible to perform the duties of the contract, parties may be excused from performance. Just because the event rendered performance more difficult, however, does not mean that it is impossible. A party may also be able to excuse performance when an important overriding event has frustrated the purpose of the contract.
Do I Need a Contract Lawyer?
Contract law can be quite complicated, and defenses to a breach of contract may vary between states. An attorney can help determine whether there is an appropriate defense when you are accused of breaching a contract.
Consult a Lawyer - Present Your Case Now!
Last Modified: 04-04-2014 04:04 PM PDT
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