In nearly each hashish litigation webinar we’ve achieved, and in a lot of our previous posts discussing breach of hashish contracts (the overall breakdown of this declare is right here), we’ve confused the significance of memorializing good hashish enterprise agreements – in writing – to avoid wasting your self from potential or protracted litigation down the road.
Nonetheless, even the perfect hashish contracts can change into the topic of breach of contract claims relying on the encompassing circumstances. In right this moment’s publish, we’re going to debate the most typical affirmative defenses to a breach of contract declare that could be relevant to a defendant’s state of affairs.
Mistake
A mistake of truth or legislation will be an affirmative protection to a breach of contract declare. This falls into two separate classes: unilateral mistake and bilateral mistake. To win on a unilateral mistake protection, the defendant should show the plaintiff (a) knew the defendant was mistaken, and (b) plaintiff used that mistake to reap the benefits of the defendant. Word that the defendant does have an obligation to make a “affordable inquiry” to know the contract (which means, you possibly can’t simply bury your head within the sand and later declare mistake). To win on a bilateral mistake protection, the defendant should show that (a) each events had been mistaken a couple of materials truth, and (b) defendant wouldn’t have agreed to enter into the contract in the event that they knew concerning the mistake.
Duress
In restricted conditions, duress can be argued as an affirmative protection in hashish litigation. I say restricted as a result of this isn’t as simple to show as some individuals imagine. With a purpose to win on a duress protection, the defendant would wish to show that (a) plaintiff used a wrongful act or wrongful menace to strain defendant into consenting to the contract, (b) defendant was afraid/intimidated and didn’t have the free will to refuse, and (c) defendant wouldn’t have consented to the contract with out the wrongful act or menace. Word that the wrongful act or menace will be one thing like legal motion (bodily hurt) or what’s often called “financial duress” (for instance, threatening a bad-faith breach of contract lawsuit).
Fraud
Fraud is arguably the most typical and most dismissed hashish litigation declare. The defendant should show that (a) plaintiff represented fraudulent statements to defendant, (b) plaintiff knew the illustration wasn’t true, (c) plaintiff made the illustration to steer defendant to comply with the contract, (d) defendant fairly relied on this illustration (once more, you possibly can’t simply bury your head within the sand!), and (e) defendant wouldn’t have agreed to the contract if they’d recognized the illustration wasn’t true. The fraudulent illustration will be each a misstatement or concealment of truth. Clearly, it is a fact-intensive protection and can be generally utilized in tandem with fraud-esque counterclaims by defendant.
Waiver
Waiver embodies the idea that the defendant doesn’t must carry out the contract as a result of plaintiff gave up their proper to have defendant carry out. A waiver will be oral, written, and even inferred from the plaintiff’s conduct – no matter can be utilized to point out that plaintiff gave up their proper. Maybe mostly, this comes up when a defendant is aware of the plaintiff has breached the contract, however continues to abide by the contract or obtain the advantage of the contract.
Novation
Lastly, novation pertains to when the defendant claims there was no breach of contract as a result of the unique contract with plaintiff was substituted by a brand new and completely different one. Whereas this once more will be inferred from the events’ conduct, the identical guidelines of contract building apply – novation requires a exhibiting that (a) there’s an intent to discharge the previous contract, (b) mutual assent, and (c) consideration. That is additionally extremely fact-intensive and the defendant has the burden to show it.