From a Monmouth County Business Attorney
Contract law is one of the most common issues in business litigation. Although contracts are typically thought to be a binding part of a business transaction, the truth is that many businesses find it necessary to break a contract in order to protect themselves, their assets and their investors. The other party in the contract may bring legal action against the business that broke the contract; however, there are certain defenses that a business can use to defend its breach of a contract.
Common Breach of Contract Defenses
There are several different defenses that can be used when handling a breach of contract claim.
- Material breach – Simply put, if the other party breached the contract first, you are no longer obligated to uphold your end of the bargain.
- Anticipatory repudiation – If you find that the other party does not intend to perform their obligations under the agreement, you are free from your own obligations in the contract as well.
- Fraud – If there is any misrepresentation of the fact, whether by inclusion or omission, the contract will not be upheld.
- Unconscionability – To be enforceable, contracts must generally be fair to all parties. If an agreement is extremely one-sided, or one party agreed to a take-it-or-leave-it contract, it could be overturned.
- Impracticability – Should an unexpected event occur that leaves one party unable to uphold their obligations, neither will be bound according to the agreement. Natural disasters, sudden deaths of key employees and financial upheavals could all breach a contract.
- Lack of capacity – Similar to duress, a contract will not be enforced if you were incapacitated, didn’t understand the terms, or were fraudulently influenced to accept it.
- Lack of a written contract
Most breach of contract defenses are considered to be “affirmative defenses.” Affirmative defenses effectively argue that even though a breach of contract occurred, some circumstance or factor justified the breach.
In a business litigation case, you may be allowed to assert multiple defenses. However, it is essential that you have qualified and experienced legal counsel on your side. A Monmouth County business lawyer can help defend your business against a breach of contract claim. Contact our office today for assistance.