One way of defending against a breach of contract claim is to raise an affirmative defense. Normally, the plaintiff bears the burden of proving his claim. However, in an affirmative defense to a breach of contract claim, it is the defendant who bears the burden of proving his defense. If he does so, the plaintiff loses. The following are a few of the most common affirmative defenses:
The Statute of Frauds
California, along with every other state, has enacted its version of the Statute of Frauds that requires certain types of contracts to be in writing. The California Statute of Frauds requires the following types of agreements, among others, to be in writing:
Transfer of an interest in real estate
Contracts that are impossible to perform in one year (a two-year lease, for example)
A promise to answer for the debt of another party (subject to certain exceptions)
The indefiniteness defense often arises when one party tries to enforce a contract that was only intended as a statement of intentions (a memorandum of understanding, for example), or the contract was missing so many terms (a price term in a sales contract, for example) that it cannot be considered an enforceable contract.
A party is fraudulently induced to enter into a contract when it relies on a deliberate misrepresentation made by the other party, such that it would not have entered into the contract if it had known the truth. If the defendant wins, the contract will be rescinded.
The estoppel defense usually arises when one contract party makes a statement to the other party indicating that he will forbear on enforcing some contractual term (a seller will allow a buyer to miss payments for three months, for example). If the buyer stops paying for three months, the seller cannot win a breach of contract claim on that basis.
The contract might purport to bind a party to perform an illegal act. In many cases, this issue arises when regulatory changes occur between the time the contract is signed and the time it is to be performed. In other cases, the drafter of the contract was unaware of regulatory requirements.
Expiration of the Statute of Limitations
A party may assert that the lawsuit was filed too late to meet the statute of limitations deadline. The California statute of limitations deadline for filing a breach of contract claim is four years from the date that the claim arose. Calculating exact dates, however, is tricky – exactly when did the claim “arise”? In some cases, this is the point where lawyers battle it out in court.
It’s Dangerous to Play the Waiting Game
In most business disputes, there is a business solution and a lawyer’s solution. In our experience, quite frankly, the business solution is usually better because it takes into account context and circumstances. Nevertheless, sometimes negotiation and compromise must be abandoned in favor of a decisive, aggressive response. When this time comes, we are ready for action.
At CKB Vienna LLP, our experienced and streetwise attorneys serve clients from all over Ontario, Claremont, Riverside, Fontana, Upland, Rancho Cucamonga, including Alta Loma and Etiwanda. Call us at 909-980-1040 or fill out our online contact form to learn how we can help you fight back against a breach of contract claim, or win one against an opposing party who may be planning to assert an affirmative defense.