Affirmative Defenses to Breach of Contract in California
When doing business, being accused of breaching a contract can be frustrating and somewhat humiliating. If the matter gets out of hand, it can damage your reputation and disrupt your business operations, costing you both money and time. Fortunately, there may be defenses available to you to avoid or limit your liability. The most common defenses against breach of contract claims are “affirmative defenses.”
The business litigation attorney at Law Offices of David H. Schwartz, INC, represents those who become involved in contract disputes when doing business. The attorney can explain the various defenses that may be available, including affirmative defenses, to ensure the most favorable outcome possible.
What Constitutes a Breach of Contract?
An individual or entity breaches a contract when they fail to fulfill their obligations under the terms of the agreement. This non-fulfillment can take several forms, including:
Failure to perform - One party does not complete their duties as specified.
Partial performance - The party only completes part of their obligations.
Late performance - Obligations are fulfilled but not within the agreed timeframe.
For a breach to be actionable, the following must be present:
Valid contract: There must be a legally binding contract between the parties.
Breach: One party must have failed to perform their contractual duties.
Damages: The non-breaching party must have suffered actual harm or loss due to the breach.
You need to understand what constitutes a breach as it lays the groundwork for presenting a robust defense when being accused of breaching a contract.
What Is Affirmative Defense?
An affirmative defense is an argument that, if proven, negates or reduces the liability of the defendant in a breach of contract case. Unlike standard defenses that merely deny the plaintiff's claims, affirmative defenses introduce new evidence or arguments that, even if the plaintiff's claims are true, provide a legal basis for dismissing or minimizing the breach.
While these defenses can be effective in contract disputes, they can shift the focus from whether a breach occurred to whether there were valid reasons for the breach. For this reason, you need to carefully examine your options and choose a defense strategy that aligns with your interests.
Possible Affirmative Defenses to Breach of Contract in California
Someone who gets sued for allegedly breaching a contract—known as the “defendant”—can use any of the affirmative defenses:
1. Lack of Capacity
A contract is only valid if all parties involved have the legal capacity to enter into it. If it can be proven that one party lacked the mental or legal capacity at the time the contract was formed, the contract may be voidable.
2. Duress
Duress involves forcing someone to sign a contract under threat or force. If a party can prove they were forced into the agreement, this can serve as a strong defense against breach of contract allegations.
3. Fraud
Fraud involves intentional deceit by one party to induce another into entering a contract. If one party can demonstrate that they were misled about essential terms or facts, they may have grounds to void the contract, even if a breach has occurred.
4. Mistake
A mutual mistake occurs when both parties share a misunderstanding about a fundamental fact of the contract. If it can be shown that this mistake had a major impact on the agreed terms, the contract may be invalidated.
5. Impossibility of Performance
If unforeseen circumstances make it impossible to fulfill the contract’s terms, this can be used as a defense. For instance, natural disasters or sudden changes in law that prevent performance can render a contract unenforceable.
6. Unconscionability
Contracts that are grossly unfair or oppressive to one party may be deemed unconscionable. A court can refuse to enforce such contracts or specific terms within them if they are excessively one-sided.
7. Estoppel
Estoppel prevents a party from arguing something contrary to a claim they previously made if the other party relied on that initial claim to their detriment. This defense can bar a plaintiff from pursuing a breach of contract claim if they acted in a way that led the defendant to reasonably believe the contract was altered or waived.
8. Statute of Limitations
In California, breach of contract claims must be filed within a specific time frame. For written contracts, the statute of limitations is four years, while for oral contracts, it is two years, according to the official website of the Judicial Branch of California. If this period has lapsed, the defendant can use it as a defense to dismiss the case.
Sued for Breach of Contract? Contact Law Offices of David H. Schwartz, INC
If the other party accuses you of breaching a contract, you might be exploring the defense options available to you. Whether you believe the accusations are well-grounded or not, an affirmative defense is something that may be worth considering. The attorney at Law Offices of David H. Schwartz, INC, helps enforce and defend against claims of breach of contract throughout the San Francisco Bay Area, including San Francisco, San Mateo, San Jose, Santa Clara, and Oakland. Call today to set up a consultation.