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All about contract disputes, including how to avoid them – part 5
Defenses to a breach of contract claim (continued)
- There was a mutual mistake – if both parties were mistaken about a fact that was essential to the contract, then the breaching party can use this as a defense in a contract dispute lawsuit. It is important to note; however, that this applies only to mistakes of fact, not to issues of judgement or opinion.
- One party lacked the capacity to contract – if the breaching party lacked the capacity to enter into the contract in the first place, then they cannot be sued for breach of contract in a contract dispute. The obvious example of a group of people who lack the ability to enter into a contract is minors. However, someone who doesn’t understand the contract also lacks legal ability to enter into it.
- One party was unfairly influenced into the contract – unfair influence can take many forms, from agreements made under duress to those based on lies or fraudulent values.
- The contract’s terms are unconscionable – if the contract is highly unfair, then the court will allow that as a defense to a breach of contract claim.
- Estoppel – estoppel is when one party makes a statement excusing the other party from performance of the agreement, and the other party relies on that statement. For example, if the bank gives a homeowner a four month delay of foreclosure so they can sell their home, they will be bound to that four month promise.
If you’re facing a lawsuit for material breach of contract, it’s important you retain a good contract law attorney. Don Harris has over 25 years of experience practicing business, financial, and contract law in New Mexico. He has the skills and experience to ensure your interests are protected.
Check back soon for All about contract disputes – including how to avoid them, part 6. In the meantime, check out our page on contract disputes.