Please note this blog post is written for employers, although we understand it may be of interest to employees as well. At this time, our firm represents business owners and employers. If you need assistance with a legal matter as an employee, please consult a firm that represents employees.
If your business has been sued for breach of contract, it is important to know how to defend yourself. You want to be prepared to raise as many legal defenses as possible.
Often, it’s not enough to deny the claims against you. You will also have to raise “affirmative defenses.”
These defenses justify steps taken in making and/or breaking a contract. Raise all defenses to a breach of contract claim as early as possible.
Doing this in a lawsuit is an extremely important part of defending yourself. Raising all defenses early also ensures you won’t be prevented from doing so later.
At BrewerLong, our business law attorneys can help you understand how to defend your business against a breach of contract claim. We’ve prepared this guide to help you understand breach of contract defenses, including affirmative defenses that can help keep your business safe.
“Both parties to a contract have obligations and duties. One party’s breach of contract may be entirely justified by the other party’s failure to perform its obligations. If you haven’t performed, you may not be able to enforce the contract.”Business Attorney, Michael Long
What is a Breach of Contract Case?
When someone brings a claim against you, they must be able to show all the basic elements of a breach of contract claim under Florida law. In Florida, those elements are:
- A valid contract between the parties;
- A material breach of that contract; and
Is the Contract Valid?
When preparing to defend yourself, confirm whether you have a valid contract with the other party.
The other side will be required to prove the contract was valid, so be sure you understand what you signed. Florida requires the following elements for a valid contract:
- One party made an offer;
- One party accepted;
- Both parties gave consideration;
- The terms of the contract were reasonably certain (and in writing if required);
- Both parties had the capacity to enter into the contract; and
- The contract was legal.
If your lawyer determines that there was no valid contract in place, this will be helpful as you defend your business.
However, most cases require a detailed assessment of the facts and circumstances that went into the formation of the contract. This is why it is important to look at each element of a breach of contract case to know what all your defenses might be.
Has There Been a Material Breach?
Assuming you have a valid contract, a claimant must show that a contract was materially breached. The Florida courts interpret material breach to mean that one party to the contract has violated the terms of the contract very severely. In that case, the other party no longer has to uphold their end of the bargain.
It is the responsibility of the claimant to show that you didn’t fulfil your end of the contract.
If someone claims you’ve breached a contract, they’ll have to show that you didn’t perform a service or deliver goods. They might have to show that you failed to pay them when they performed a service for your company. It’s a very strong defense if a claimant can’t show that the contract was materially breached.
Has the Claimant Suffered Damages?
Someone filing a breach of contract claim against your business must also show they suffered damages. This means that they must show they were harmed when the contract wasn’t performed. It’s the responsibility of the claimant to show that they suffered losses.
For example, they might have to show the court that they had to seek a higher-priced vendor to fulfill the broken contract and therefore lost the benefit of the bargain they would have received if you had fulfilled your contract obligations.
If the claimant cannot show that they suffered damages, this will also help your defense. The team at BrewerLong can help you understand the intricacies of contract claims against your business. We have successfully served the Florida business community for over a decade.
Elements of Successful Affirmative Defenses
If someone is able to make out a claim against your business for breach of contract, it is extremely important to raise all defenses as quickly as possible, including affirmative defenses.
Defining Affirmative Defense to Breach of Contract
An affirmative defense presents an alternative set of facts to a claimant’s claim against your business. If these facts are credible, they negate your potential liability. Most defenses to breach of contract claims are affirmative defenses.
What are Some Affirmative Breach of Contract Defenses?
Defenses to a breach of contract claim can include a number of scenarios. Let’s explore some breach of contract affirmative defenses in detail below:
The claimant indicated by words or actions that they were not going to perform their end of the bargain.
You and the other party may have agreed to “cancel” the agreement, or someone who works for the claimant may have indicated that they weren’t going to follow through.
In business cases, determining whether the affirmative defense of repudiation applies can involve questions of authority and intent. In other words, the critical question may be, Did the person who repudiated the contract have the authority to do so? The other question might be, Did the person intend to repudiate the contract by acting in that way or saying those things?
The other person revoked the contract before it could be performed. Like revocation, questions of authority and intent may be critical in determining whether this defense applies. A business attorney can help you gather the appropriate evidence to present to the court to prove this defense to a breach of contract applies in your case.
If someone threatened you into making the contract, then you don’t have to follow through with its terms.
The contract is illegal in the place where it’s made, or it violates the laws of another state or country. This may happen because of a law change or because someone didn’t read the contract carefully before signing.
Lack of consideration
As we talked about before, every contract needs to be supported by consideration. Consideration is the “skin in the game” that each person needs to have to reap the benefits of the contract. If your contract fails to impose a duty on both parties to the contract, you may be able to breach it.
Lack of capacity
Another defense to a breach of contract is “lack of capacity.” This means that the person from your business who made or signed the contract lacked the capacity to make/sign the contract. For example, they may not have had the appropriate permissions to do so.
Let’s say that enforcing the contract is grossly unfair because the bargaining power between the parties was severely unbalanced. Do you still need to abide by the contract’s terms? Not necessarily. “Unconscionability” is one of the affirmative defenses for a breach of the contract meant to help level the playing field.
Before deciding to breach a contract, talk to a business attorney to determine if this defense applies to your situation.
Statute of Limitations
The statute of limitations is in place to ensure that people bring lawsuits within a reasonable amount of time, preferably when evidence and memories are fresh. If the claimant fails to bring the breach of contract lawsuit in a timely fashion, you can assert this as one of the defenses for your breach of contract.
This is a non-exhaustive list. There are many more potential affirmative defenses that BrewerLong business law attorneys can help you explore. Our experienced team has deep knowledge of contract law defense. Trevor Brewer, Mike Long, and their team have dedicated their careers to helping business owners like you keep their businesses safe.
Other Breach of Contract Defense Considerations
While traditionally considered an affirmative defense to breach of contract, it’s important to note that you have the right to “argue in the alternative.” This means that you may present each of the breach of contract defenses you think is applicable to your case, even if some contradict each other. You can argue that the contract was invalid, and you can argue that you fulfilled your part of the contract. You are able to do both at the same time during a court case.
It’s important to talk to a business attorney once a dispute arises between you and the claimant, even if they haven’t yet sent you notice of a lawsuit. The attorney can evaluate your case and help you determine how to mitigate your potential liability before the other party files a lawsuit. Further, an attorney can help you ensure that breach of contract affirmative defenses are available to you by speaking with other parties on your behalf. After all, the last thing you want is to inadvertently say something that jeopardizes your rights.
Experienced business law attorneys can help you navigate this complex world of contract law and litigation. The team at BrewerLong is standing by to help you with your contract litigation needs.
Why BrewerLong Business Law Attorneys
You’re a busy entrepreneur with no time to spare. Why spend any time worried about claims against your business? We can take some of the hassle, fear, and time spent dealing with contract litigation away from you, so you can focus on your work. At BrewerLong, we handle each case with the individual attention it deserves.
Contact us today for a consultation with one of our attorneys, and see how we can help you with your breach of contract defense.
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