As we have discussed in a previous post, breach of contract occurs when you, or another party, breaks a contract, or fails to fulfil any of the contract’s terms. At The Jackson Law Firm, we are often asked what to do if you have been accused of violating a contract in Texas. In this post then, we will discuss how to defend against breach of contract claims.
In general, business contracts are legally binding documents, meaning you cannot just back out of them. Thus, you must typically have just cause for why you did not follow through with the terms of the contract. In such situations, there are a number of arguments, which the courts may accept as reasonable excuses.
According to the Institute of Public Law, a mutual mistake within the contract may serve as an acceptable defense for a breach of contract. In this type of situation, the contract might state something that is different from what you, and the other party, intended. For example, both sides agreed that a shipment of good would be delivered on February 15. The contract, however, states January 15. Such cases may explain why the terms of the contract were not fulfilled as specified.
Fraud is also frequently used as a defense to contract breach claims. If, for example, you refused to sell your goods to company A. Instead of finding another vendor, company A sends company B to purchase the goods from you. Then, company B turns your goods over to company A. The court may not hold you to the terms of the contract with company B. Likewise, you may also use this defense if you were enticed to enter into the contract under duress or by undue influence exerted by someone you trusted.
In order to defend against a breach of contract claim, you may also be able to argue that a contract was indefinite. This argument may be used in situations when you and the other party never agreed on the essential terms of the contract. It may also be valid if you made an agreement to agree, but never specifically signed a contract. In these cases, however, the court will often require you to act in good faith and to come to terms on an agreement with the other side.
For more information about these types of business disputes, please visit our breach of contract page.