In contract law, there are generally four types of defenses that can be used against an action for a breach of contract. The first is known as “anticipatory repudiation”, which happens when a breaching party notifies the non-breaching party to a contract that they are not going to hold up their end of the agreement.
The second is called “defense by waiver”, which occurs when a non-breaching party allows the breach to continue and thus gives up their right to be able to enforce the contract.
The third type of defense is referred to as “tortious interference.” Tortious interference occurs when someone who is not a party to the contract intentionally interferes with the performance of a contract.
The fourth and final defense that is primarily used against a breach of contract will be covered throughout the rest of this article and is known as the “unclean hands” doctrine.
What is the Unclean Hands Doctrine?
There are two main types of remedies that can be awarded in a contract lawsuit: legal remedies (such as compensatory or monetary damages) and equitable remedies (like specific performance). While some of the defenses to a breach of contract can be used against recovering either type of remedy, the unclean hands doctrine just so happens to be an equitable defense.
The unclean hands doctrine, sometimes referred to as the “dirty hands” doctrine, is normally used when the person being accused of a breach argues that the other party should not be entitled to a remedy because they were also responsible for committing a breach. Under this doctrine, neither party will be liable because both parties are said to have “unclean hands.” In other words, both parties did something wrong to cause a breach so neither should be given relief.
This doctrine is only available, however, as a defense against claims that include a request for certain forms of relief and which require the court to order a party to perform some sort of action in relation to the contract.
In other words, this defense is not available in cases where monetary remedies are the only solution. The non-breaching party must be able to receive an equitable remedy before the defendant can assert the doctrine as a defense.
In addition to being used as an equitable defense, this doctrine can also be used as an affirmative defense. An affirmative defense is when a defendant alleges that the plaintiff has done something, which disqualifies them from being able to obtain relief. Thus, the defendant carries both the burden of raising the defense and proving it in court.
When Can You Use the Defense of Unclean Hands?
The unclean hands doctrine may be used by both the plaintiff and the defendant in a contract claim. In many contract lawsuits, a plaintiff may ask the court to provide any of the above mentioned equitable forms of relief, so long as they meet the proper requirements.
In response, the defendant may raise the unclean hands defense against their claim, arguing that the plaintiff is not entitled to it because they too did something wrong in regard to the contract. For instance, if the defendant appears to have breached the parties’ contract and the plaintiff decides to sue them for damages, but in reality, the plaintiff also made some mistakes.
Some examples of scenarios when a plaintiff may also be in the wrong include:
- Intentionally providing the defendant with inaccurate information in the hopes that they make a mistake based on it;
- Purposely and knowingly not responding to correspondence from the other party on time; or
- Assuming the defendant will not fulfill their side of the deal, so the plaintiff breaks the contract.
Basically, any action made by the plaintiff that shows they were also in the wrong can potentially help this defense succeed. Even if the plaintiff can tell by the defendant’s situation or actions that the contract might never be fulfilled, they still need to uphold their end of the contract.
Any actions that show a plaintiff was not going to complete the contract or that they intended for it to fail for their benefit, will give the defendant an option to use the defense of unclean hands. Alternatively, the plaintiff may also argue that the defendant is not entitled to some form of the doctrine because they too have unclean hands.
What is Needed to Prove the Defense of Unclean Hands?
The requirements for an unclean hands defense tend to be very broad in their application and might vary from state to state. In general, it is typically not necessary that the plaintiff commit the same wrongdoing as the defendant to be able to use it.
An action may be grounds for unclean hands if it violates “good faith or conscience”, which are both common equitable standards for evaluating a party’s conduct. A person raising the defense must have evidence that the wrongdoing is directly related to the contract in order to prove unclean hands.
A plaintiff may have unclean hands even when their actions are unrelated to the defendant’s alleged violations. Some examples of such conduct that might establish unclean hands include:
- Failing to fulfill their own side of the agreement;
- Acting in a manner that constitutes fraud and pertains to the contract;
- Committing any crime in connection to the contract; or
- Acting in a way that demonstrates coercion, violence, or duress in regard to the contract formation stage or the contract itself.
A common scenario is when a plaintiff accuses the defendant of breaching their agreement, but has also acted in bad faith (e.g., committing fraud when entering into the contract). The defendant will then be able to assert the unclean hands doctrine as a defense to the plaintiff’s claim for breach of contract.
Do I Need to Hire a Lawyer for Help with an Unclean Hands Defense?
The unclean hands doctrine can be a complicated defense to use since both the plaintiff and defendant are entitled to raise it during a lawsuit. Therefore, if you are involved in a contract dispute, you should consider working with a local business attorney to get further assistance with your claim.
An experienced business attorney will be able to determine if there are enough facts and evidence for your case in order to raise the unclean hands doctrine as a defense. A lawyer will also be able to assess whether or not there are other defenses available to you and the potential remedies that might be awarded by the court.