Notice that I’ve emphasized the word “alleged” to stress the point that the Plaintiff bears the burden of proving the merits of the lawsuit.
While many contract actions are based on sound legal arguments, you may be surprised to learn that a good number of these lawsuits are successfully challenged.
There are a number of defenses that can be raised when a party is sued for breach of contract. While each case is different, I’ve highlighted the top 5 defenses below:
1. Statute of Limitations
Under Florida law, a breach of contract claim must be filed within five (5) years. If the lawsuit is filed later than five years, the claim is permanently barred and the injured party will be prevented from recovering damages for their financial and emotional losses.
2. Fraud in the Inducement
Fraud in the inducement is the use of deceit or trick to cause someone to act to his/her disadvantage, such as signing an agreement or deeding away real property. The heart of this type of fraud is misleading the other party as to the facts upon which he/she will base his/her decision to act. Example: “there will be tax advantages to you if you let me take title to your property,” or “you don’t have to read the rest of the contract–it is just routine legal language” but actually includes a balloon payment.
Duress is defined as severe pressure or other influence that destroys a party’s free will and forces the defendant to do an act or enter into a contract. Florida courts recognize that it is inequitable for a party to enforce a contract when one or more parties are pressured, forced or coerced into signing the contract in question.
4. Impossibility of Performance
When a party to a contract is unable to perform according to the contract terms due to circumstances beyond their control, this is referred to as “impossibility of performance.” The three categories of cases where this general principle has been traditionally applied are (1) supervening death or incapacity of a person necessary for performance. (2) Supervening destruction of a specific thing necessary for performance. (3) Supervening prohibition or prevention by law.
5. Unilateral or Mutual Mistakes
A unilateral mistake occurs when one party was mistaken about the terms of a contract at the time they entered into it. A mutual mistake happens when both or all parties of a contract were mistaken at the time the contract was signed. Under Florida law, if any party of a contract is mistaken about the terms of a contract at the time the contract went into effect, their mistake may be a legitimate defense for not performing as obligated.
If you or your business has been sued for breach of contract, it is best to consult an experienced contracts attorney to determine whether the defenses highlighted above—or any others– work for you. An experienced attorney can determine the strength of available defense, and whether they are a viable option.