Colorado businesses often rely on contracts. A contract is a mutual agreement between two or more parties, supported by “consideration” (a promise or something of value), which are often—but not always—signed and in writing.
If a party to a contract believes the agreement has not been honored, they may file a lawsuit against the other party. In that case, the party being sued—the Defendant—can assert defenses. Multiple defenses may be available to a Defendant.
Whether you’re bringing the case as a Plaintiff or are the Defendant, it’s important to know the different types of defenses for breach of contract lawsuits. The right business litigation attorney for your case will help you understand the applicable defenses.
Common Breach of Contract Defenses
Statute of Limitations
If a party to a contract waits too long to file a lawsuit, some or all of their breach of contract claims may be barred by the statute of limitations. Different contracts have different statutes of limitations in Colorado, so it is important to engage an attorney who can tell you what statute of limitations applies.
Failure to Mitigate Damages
A victim of a breach of contract must take reasonable steps to reduce or minimize the damage they suffer due to the breach. A failure to mitigate damages may result in some or all of the damages sought by a breach of contract claim to be barred.
A party may claim duress if a contract was signed under coercion and not of free will. This can include being forced through extortion, blackmail, physical threats or other unlawful actions.
A contract may be unenforceable and not legally valid for many reasons. One reason is if the conditions of a contract are indefinite and not clearly defined. The agreement could be vague or essentially unfinalized.
A contract may be unenforceable if mutual mistakes are made in connection with the agreement. This means the terms were misunderstood by both parties. Mistakes may be made with no ill will but must be related to essential terms or information that affect the exchange inherent in the agreement. These mistakes can render the contract invalid.
Unenforceability defenses can include any type of illegality in the contract. Its purpose must be lawful in order to be enforced. A contract may not be enforced if its purpose is deemed illegal.
If a contract’s terms are impossible to carry out, then the contract may be unenforceable. This defense is similar to impracticability, where a contract term is extraordinarily expensive to perform, and force majure or frustration of purpose, where an unexpected event or circumstance makes performance of the contract nearly impossible.
If the contract is highly imbalanced, it may be deemed unconscionable and therefore unenforceable. This may include terms that are grossly unfair or difficult to understand, whether one party has greater bargaining power over another, or if a party has taken advantage of another with unfair conditions.
Statute of Frauds
Certain kinds of contracts must be in writing to be enforceable. With various exceptions, contracts that cannot be performed within a year, promises to pay someone else’s debt, contracts concerning real estate, and certain agreements related to marriage can be deemed void by Colorado’s Statue of Frauds if they are not in writing and signed by the supposedly breaching party.
Fraudulent inducement is the misrepresentation of important facts to get someone to enter into a contract. If proven, the defense of fraudulent inducement may result in the voiding or rescinding of a contract.
Get Advice From an Experienced Business Litigation Attorney
Whether you’re a plaintiff or a defendant, you’ll need help with your breach of contract case. At Keating Wagner Polidori Free, our experienced attorneys work hard to protect your contractual rights. Call our Denver office at 303-534-0401 or send us a message to arrange a confidential consultation.