Being the target of litigation is potentially disruptive to your business. If you have been accused of breaching a contract, the outcome could be financially devastating. You may be faced with significant damages, lost productivity, and a hit to your company’s reputation.
But just because a plaintiff files a breach of contract lawsuit doesn’t mean they will win the case. You have potential defenses available to you. With the help of a New York business lawyer, you can make your best case. Let Rosenbaum & Taylor serve as your legal counsel.
Here are some defenses that you might have.
Failure to Prove a Breach of Contract Case
To prevail in a breach of contract claim in New York, a plaintiff must prove all four of these elements:
- The existence of a valid contract between the parties.
- The non-breaching party performed its contractual duties.
- The other party failed to perform its contractual duties.
- The non-breaching party experienced damages as a result of this failure.
The burden of proof lies with the plaintiff. All four elements above must be proven by the preponderance of the evidence. This means that the defendant is more likely than not in breach. If the plaintiff fails to establish these elements, the lawsuit will fail.
Impossibility
Impossibility means that a party cannot fulfill its contractual duties. This does not mean that performance is simply difficult or even more expensive. Even if performance imposes more of a burden than was originally expected, this isn’t sufficient to prove impossibility. That is viewed as the risk of doing business and won’t excuse performance.
An example of impossibility would be if a musical artist agrees to put on a concert in a venue. The day before the concert, the venue burns down. The artist cannot perform under the contract and would therefore not be liable for a breach.
Lack of Capacity
Capacity refers to the legal ability to enter into a contract. Incapacity means an individual could not legally enter into such an agreement. For example, a child cannot be a party to a contract and will not be held liable for failing to perform under it. A person who isn’t of sound mind, for instance due to dementia, does not have legal capacity. Neither does someone who is intoxicated when he or she enters into the contract.
Mistake
If both parties were mistaken about the underlying facts of the contract when it was made, it might not be enforceable. Take, for example, a situation where one party sells another a piece of fine art. Both believe the piece of art to be genuine. However, it later turns out that the artwork was a counterfeit.
The mutual mistake would likely be enough to undo the contract. This is typically not the case when only one party was mistaken unless fraud was present.
Unconscionability
An unconscionable contract is one which is determined to be extremely and unacceptably unfair. Unconscionability may be evident in the manner in which the contract was entered into. This is known as procedural unconscionability. Or the terms themselves may be so one-sided that the contract is determined to be substantively unconscionable.
Illegality
Courts will not enforce an illegal contract. This is obvious in many cases, such as an agreement to break the law or commit a crime. But illegality is not always evident. The parties may genuinely not understand that the subject matter of the agreement is against the law or public policy. If you are unsure whether the contract is legal, check with a knowledgeable business lawyer right away.
Statute of Limitations
Parties do not have an unlimited amount of time to file a breach of contract lawsuit. The deadline, known as the statute of limitations, is six years. The clock starts to run from the date of the breach. If the lawsuit is filed too late, it can be thrown out for being outside the statute of limitations.
Representing Your Best Interests in New York Contract Law Disputes
Are you facing allegations of breaching a contract? Has the other party breached and caused you financial harm? Whether you are the plaintiff or the defendant, our firm can advocate for you. Trust the New York business lawyers of Rosenbaum & Taylor.
