Breach of contract. Those words conjure up images of corporate deals, smart lawyers, and lots of money. Yet, most contract cases are not complicated; they’re quite simple. In fact, the average adult has multiple contracts. Contracts are agreements between two or more parties to abide by written or stated terms.
When you sign for a credit card, that’s a contract between you and the credit card company. When you buy a car, house, or boat, you enter into a contract with the seller, mortgage company, or lender. When a mortgage company files for foreclosure, it’s really a breach of contract suit.
Contracts are easy to make. Have you ever entered into an agreement with someone only to find out you couldn’t keep up your end of the bargain? Are you currently in breach of a contract for personal, ethical, or financial reasons? If so, arm yourself with one or more defenses, or at least a strategy for getting free of the agreement.
You’ll find a wide range of options for defending yourself against breach of contract lawsuits, including notification and affirmative defenses.
Notification–Work it Out
A potential plaintiff who feels that someone has breached a contract with them (or is about to do so) might send a notice informing the other person of the problem. Some courts or contracts might even require notice before the plaintiff can file suit. Conversely, if you feel it may not be possible to hold up your end of a contract, you too have the option to send a notification. Try to work something out with the other side. By providing notice ahead of time, you and the other party may be able to collaborate on a change to the contract. On occasion, the other party may consider this to be an “anticipatory breach” of contract and start legal proceedings against you, but most people want to stay out of court. So a notification is a good option.
Sample Affirmative Defenses Against Breach of Contract
Another option for defending yourself against a breach of contract claim are affirmative defenses. This means that you as a defendant can explain that certain circumstances led to the contract no longer being relevant. Essentially, you’re saying “Yes, I breached the contract, but I’m not liable for harm to the plaintiff.” The scenarios below illustrate this argument.
Cindy owned a cake shop and agreed to provide twenty cakes to a local business for a major event. The contract specified that the cakes were to be chocolate cakes with chocolate frosting. However, Cindy realized that she did not have enough chocolate frosting for all of the cakes.
She decided to call the business owner to let them know that half of the cakes would have vanilla frosting. The business owner said it would be fine, so Cindy baked all of the cakes and presented them at the event. A week later, the business owner refused to pay Cindy, saying that she went against their contract by using vanilla frosting on half of the cakes. Because Cindy notified the business owner of the change in frosting, she should have a strong defense such as waiver against a potential claim. The plaintiff, having agreed to the changes and accepted the cakes, is said to have relinquished their right to the chocolate frosting as per the contract.
Carlos owns an RV park that provides spaces for seasonal tenants several months out of each year. These seasonal tenants enter into contract agreements with Carlos, ensuring they always have their spots available. However, this year a horrible storm blew through the region and destroyed a number of the RV sites and facilities on the property.
One of Carlos’ seasonal tenants sued him for breach of contract, claiming that because Carlos does not have a spot available, he has violated the terms of their agreement. In court, Carlos argues that because it was impossible to provide an RV site due to damage from the storm, he is unable to hold up his end of the contract by no fault of his own. Under these circumstances, Carlos can rely on multiple affirmative defenses, including impossibility or impracticability of performance because the storm was no fault of his. Since the events were unexpected and not his fault, Carlos might also assert a force majeure defense.
Other Affirmative Defenses Against Breach of Contract
Below are other common situations where an affirmative defense against breach of contract is applicable. Keep in mind that a contract is a contract. So, no matter how small or insignificant your contract seems, you may be able to prevail on multiple defenses.
- The contract is unconscionable. If you can prove to the court that the terms of the contract are entirely unfair, or that bargaining power is incredibly imbalanced, the court may side in your favor.
- There are mistakes in the contract agreement. If you or the other party included something incorrect in the contract, like the incorrect owner of a piece of real estate, the rest of the contract could be nullified.
- You were forced or tricked into the contract. If you were coerced or fooled into agreeing to a contract without full knowledge of the outcome or specifics of the deal, you can avoid being sued for damages.
- The contract is illegal. If the object of the contract involves something illegal, like gambling, tax law violations, or destruction of records, a court will throw out the plaintiff’s case.
- The essential terms of your contract were not clearly defined. You can argue that because the terms are not clearly stated, it cannot be enforceable.
- Some specific terms of the contract were not put in writing. If some element of the contract was communicated verbally, you are not legally required to do it.
Again, contract cases are quite common, and so are contract breaches. If you shorted your landlord on the rent or was late on your credit card payment, you’ve essentially breached a contract. Maybe you’ll be sued and maybe you won’t — this time. So look long and think hard about the defenses you’ll assert if you’re ever dragged into court on a breach of contract.
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