Breach of contract is a legal term that refers to the failure of one party to uphold their end of the agreement, leading to a violation of the terms of the contract. When this occurs, the other party is entitled to legal remedies that can range from compensation to termination of the contract. However, there are defenses to breach of contract that can be used to protect the alleged breaching party. Here are some of the most common defenses:
If the performance of a contract is impossible due to unforeseeable circumstances, such as natural disasters, war, or other external factors that make it impossible to fulfill an obligation, then the breaching party may raise the defense of impossibility. For instance, if a construction company is unable to complete a building due to an earthquake, they may be able to argue that the contract became impossible to perform.
2. Force Majeure
Similar to the impossibility defense, force majeure refers to unforeseeable external events that hinder a party from fulfilling the terms of the contract. This defense typically includes events such as acts of God, riots, strikes, and government actions. However, the parties must have included a force majeure clause in the contract to raise this defense.
3. Mutual Mistake
A mutual mistake occurs when both parties made an error in the contract that renders it unenforceable. This defense requires the parties to demonstrate that they both had a mistaken belief about a material fact that was essential to the contract`s performance. For example, if two parties agreed to build a house on a piece of land that neither of them owned, then they can use the mutual mistake defense.
When one party enters the contract under threat or coercion, they may raise the defense of duress. This defense requires the party to show that they were forced into signing the contract and that they did not freely enter the agreement.
An unconscionable contract is a contract that is so one-sided that it is unfair and unjust. This defense is often raised when a party has significantly more bargaining power than the other and includes terms that are unreasonable or oppressive. For example, if a landlord includes unreasonable rent increases in a lease agreement, then the tenant may raise the unconscionability defense.
In conclusion, these defenses to breach of contract can help protect the alleged breaching party from legal actions. However, the applicability of these defenses will vary depending on the specific circumstances of the contract. Therefore, it`s essential to consult an experienced attorney who can provide legal advice and guidance on the matter.