Defending Breach of Contract Litigation and Arbitration
Defending against breach of contract claims requires a meticulous review of your situation and a full exploration of your options and available defenses. Whether it comes by way of arbitration or litigation, a positive resolution depends on your ability to carefully examine the most appropriate defense for your case.
Most defenses to contractual breach claims are called “affirmative defenses.” As plaintiffs have the burden of proving their claims in litigation (and parties opposing arbitration the burden of proving a defense to arbitration), affirmative defenses do not contest the claims, but instead, assert other facts or circumstances which render the plaintiff’s claim moot. Generally, they’re assertions that the plaintiff should not win the suit, even if the contract was breached.
Examples of common affirmative defenses to contractual breach claims include:
- Indefinite Contract – The contract is missing essential terms (i.e. length of the agreement, key specification, etc.) and as such is unenforceable.
- Mutual or Unilateral Mistake – Claims that a contract is unenforceable due to the mistaken belief of one or both contracted parties.
- Statute of Fraud (Contract Was Supposed to Be in Writing) – Contracts which are not in writing or signed as required under Texas law (i.e. written agreements required for real estate purchase or lease over 1 year) may be unenforceable.
- Inducement – A party entered into a contract based on misrepresentations of material facts made by the other party, thereby invalidating the contract.
- Impossibility of Performance – Circumstances beyond the party’s control have changed so drastically that it becomes impossible for them to perform (i.e. house destroyed, the party dies or becomes disabled, etc.).
- Statute of Limitations / Laches – Too much time has passed since the alleged breach occurred (in Texas, this is four years unless a provision within the contract lessens the SOL to two years) or, regardless of statute of limitation, the plaintiff unreasonably delayed enforcement and the defendant assertion of defenses or rights was negatively affected.
- Repudiation / Estoppel – Plaintiff bringing the claims previously indicated (without cause or via unconditional words or actions) they would not perform contractual obligations or one party previously promised to excuse performance of the agreement and the other party relied on that statement.
- Novation (New Contract) – The original agreement was replaced by a new contract and is therefore unenforceable.
- Accord and Satisfaction – Party bringing claim already accepted lesser payment from the defendant to fully satisfy the contract terms.
- Condition Precedent (Required Condition Did Not Happen) – A condition specified in the contract failed to happen before the other party was required to perform its obligations.
- Illegality – Contracts are unenforceable if they enable illegal acts (i.e. importing products without permit, tax violations, etc.)
- Waiver – The plaintiff has given up their rights through written or oral means, or implied as much through their conduct.
- Ratification – Action or non-action was approved by the plaintiff.
Texas Trial Lawyers With a Record of Success
At Hendershot, Cowart & Hisey, P.C., we represent clients in a range of business litigation and arbitration matters and have experience protecting the rights and interests of clients facing breach of claims pertaining to a range of contracts and industries – including construction, real estate, oil and gas, and more.
From proactive counsel when creating enforceable contracts and managing litigation risks to aggressive enforcement and defense, our team knows how to handle these high-stakes matters. Call (713) 909-7323 or contact us online to speak with an attorney.