Despite the certainty businesses expect contracts to bring, poorly worded or ambiguous language often lands them in a quagmire. Contracts are often breached or appear to have been breached, leading to litigation. Given the stakes, these can be stressful times as a business owner. If you are accused of breaching a contract, you might be forced to pay damages and your reputation may be affected. In turn, this may affect your future business dealings . If you are the victim of a breach, you have lost out on something you were expecting, which can send ripples across many of your business operations.
A breach of contract claim can be defended against in many ways. Regardless which side of the argument you occupy, these defenses may help you defeat the claim.
- Impossibility: This defense may be useful if some event has made it impossible to perform under the contract’s terms. For instance, a home may have burned down preventing renovations, travel restrictions may have delayed delivery by a certain date, a tornado may have damage equipment necessary to manufacture contracted goods, or a global pandemic may make performance impossible.
- Fraudulent inducement. This defense requires a showing that the opposing party misrepresented or lied about material facts which, had the other party known the truth, would have caused the other party not to execute the contract.
- Unilateral mistake: This defense requires a showing that one of the parties misunderstood a crucial part of the contract, then later realized the mistake. The contract will be unenforceable if the offending party knew or should have known that the other party would be mistaken and failed to take steps to remedy the issue.
- Accord and satisfaction: In many cases, the parties fail to adhere to the strict terms of the contract, but one party may accept something less than what was agreed upon. This could be considered satisfaction of the contract terms, meaning that the accommodating party is prohibited from suing for any other responsibilities.
These are a just a few of the many defenses available in breach of contract cases. The most effective defense will depend on the provable facts, which makes it imperative to discuss the various issues with a skilled business law attorney who will fight for your interests. And going forward, consulting with a skilled business attorney to draft a contract may prevent these issues from ever coming to the fore.