In contract law, there are generally four types of defenses to a breach of contract. The first is anticipatory repudiation, which means that the breaching party notifies the non-breaching party that they are not going fulfill their end of the bargain. The second is a defense by waiver which means that the non-breaching party is allowing the breach and gives up their right to enforce the contract. The third is called tortious interference which occurs when someone intentionally interferes with the performance of a contract. The last defense will be covered in-depth below, and it’s called the unclean hands doctrine.
The unclean hands doctrine is an equitable defense and is sometimes referred to as the “dirty hands” doctrine. Under this defense, the person being accused of breach argues that the other party is not entitled to a remedy because they also committed a breach. Under this doctrine, neither party is liable because both parties have “unclean” hands and both committed wrongdoings.
This doctrine is an equitable and an affirmative defense, however, it is only available in claims with forms of relief that involve the court ordering the defendant to perform some sort of action. This defense is not available in cases where monetary remedies are the only solution.
An affirmative defense is when the defendant alleges that the plaintiff has done something which disqualifies them from obtaining relief. Therefore, the defendant has the burden of both raising the defense in court and proving it.
This doctrine may be used by both plaintiff and defendant in a contracts claim. In any contracts claim, a plaintiff may request the court to provide the above-mentioned forms of equitable relief.
In response, a defendant may raise the unclean hands defense arguing that the plaintiff is not entitled to a remedy because they have also committed some type of wrongdoing. For example, the defendant appears to have breached the contract and the plaintiff is suing for damages.
But in reality, the plaintiff also made some mistakes, such as:
- Giving the defendant wrong information in the hope they make a mistake;
- Knowingly not responding to correspondence on time; and/or
- Assumed the defendant will not complete their side of the deal and already broke the contract.
Essentially, any action by the plaintiff that showed they were also in the wrong in the process. While a plaintiff may see the defendant’s situation and assume that the contract cannot be fulfilled, they still need to uphold their end of the deal.
Anything a plaintiff does that shows they were not going to uphold the contract or intended for it to fail, for their benefit, will give the defendant the defense of unclean hands. In addition, the plaintiff may argue that the defendant is not entitled to some form of defense because they too have unclean hands.
The requirements for unclean hands tend to be very broad and vary from state to state. In general, it is not required that the plaintiff commit the same wrongdoing as the defendant. An action may be grounds for unclean hands if it violates “good faith or conscience”, which are common equitable standards for evaluating conduct. A person raising the defense must have evidence that the wrongdoing is directly related to the contract in order to have unclean hands.
A plaintiff may have unclean hands even if they committed an offense that is unrelated to the defendant’s alleged violations. Some examples of conduct which might constitute unclean hands are:
- Failing to perform one’s own side of the contract agreement;
- Any act of fraud in regards to the contract;
- Committing any crime in connection with the contract; and/or
- Any act of coercion, violence, or duress in regards to the contract formation or contract itself
A general example is when a plaintiff accused the defendant of breach of contract. However, if the plaintiff acted in bad faith such as fraud when formulating the contract, the defendant would then be able to raise the unclean hands defense.
The unclean hands defense can be a complicated defense since both the plaintiff and the defendant are entitled to raise it. Therefore, if you are involved in a contract dispute, working with a local business attorney can help your claim.
They will be able to determine if there are sufficient facts and evidence present to raise the unclean hands defense for your situation. An experienced contracts lawyer would also be able to examine whether there are other defenses are available to you and what remedies could be awarded.