Defendants who face breach of contract claims may have several defenses available to challenge performance. This article will dive into some of those defenses.
Defense 1: Accord and Satisfaction
The first such defense is accord and satisfaction. Accord and satisfaction occur when the parties to a contract mutually agree to resolve their dispute by eliminating their original agreement and entering into a new agreement. Subsequently, the parties perform their respective obligations under the new agreement. The performance under the new agreement discharges the defendant from the prior obligations, rendering the old agreement unenforceable. Performance under the new agreement precludes plaintiff from attempting to enforce the defendant’s obligations under the previous agreement.
Defense 2: Ambiguity
Ambiguity is another defense which a defendant may assert. Ambiguity concerns a particular term of the agreement which the parties interpreted in different ways. For example, suppose a payment plan scheduled in an agreement requires payment of $100,000 in ten monthly installments of $11,000. Ten monthly payments of $11,000 totals $110,000. So, does the contract require payment of $100,000.00 or $110,000? The defendant can argue that his interpretation of the ambiguous term was correct, and therefore, he did not breach the contract.
Defense 3: Anticipatory Breach
Furthermore, anticipatory breach is a defense available to a defendant when the plaintiff anticipatorily breached the contract. In this instance, defendant may be excused from performing contractual obligations because the plaintiff repudiated the contract before the defendant’s performance was due. For example, say plaintiff was expected to deliver a shipment of ice cream to defendant’s ice cream parlor before defendant was expected to pay. A defendant will be excused from paying for the ice cream if plaintiff failed to provide it.
Defense 4: Unclean Hands
Unclean hands is another defense that a defendant may be able to assert if the plaintiff engaged in some wrongdoing in performance of the contract. However, in order to successfully invoke this defense, the defendant must be able to demonstrate that he relied on the plaintiff’s misconduct which resulted in harm to defendant and as a result, plaintiff may not be awarded equitable relief.
Defense 5: Ratification of Allegedly Wrongful Act
Finally, a plaintiff may be barred from enforcing a breach of contract claim if plaintiff ratified the allegedly wrongful act. Say you, defendant, delivered 100 bushels of wheat though plaintiff ordered 120 bushels. If plaintiff accepts and pays for the 100 bushels, he cannot later claim that you breached the contract. Plaintiff was aware that you delivered 20 less than expected because you advised him as much, and he decided to accept the 100 for the price of 100 bushels. In this instance, Plaintiff ratified and relinquished any right to demand the 120 bushels based upon that contract.
It is important to keep in mind that these defenses may not extinguish liability entirely but may help to mitigate damages or prompt meaningful settlement discussions. If you have questions about breach of contract defenses, or need help with your particular commercial dispute matter, KI Legal’s knowledgeable litigation attorneys are here to help. Schedule a free consultation by calling (212) 404-8644 or emailing info@kilegal.com.
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