Well-negotiated contracts can position your business for success. They can help secure materials at an affordable costs, thereby giving you consistent inventory, and they can lock in clients and customers into services and sales that generate steady income. But contractual issues arise all the time. If you don’t appropriately address them, then you could end up losing a significant amount of money, goodwill, and reputational value. This is especially true if you’re accused of breaching a contract.
How can you avoid these bad outcomes and effectively defend yourself against breach of contract allegations? Let’s take a closer look.
Tips for defending yourself against breach of contract allegations
If you want to avoid judgment against you in a breach of contract case, then you need to be prepared to raise a strong defense. Depending on the facts of your case, there may be several defense options available to you. This includes the following:
- The contract wasn’t reduced to writing: Although some verbal contracts will be deemed enforceable, there are others that are required to be put in writing. And even if a verbal promise was made in your case, the onus will be on the other party to demonstrate why that promise should be enforced as a contract. If they’re unsuccessful in doing so, then you might be able to successful defend against their claim.
- The other party used fraud to induce you to agree to the contract: Fraudulent inducement is a common occurrence in business law. Here, the other side intentionally or recklessly misconstrues the facts with the intent of getting you to agree to the contractual terms in question. In other words, you’re duped into agreeing to the contract based on bad information. If you can demonstrate that you relied on the misconstrued facts to your detriment, then you can successful defend yourself against allegations of breach.
- It has become impossible or impracticable to perform your contractual duties: If circumstances have changed such that it has become impossible to comply with the terms of the contract, or that it has become extremely impracticable to adhere to the contract’s terms, then you might be able to successfully demonstrate that you’re not in breach of the contract.
- The other party waived the alleged breaching behavior: If a breach occurs, the wronged party should act on it to enforce the contract. If they don’t and instead allow breaching behavior to continue, then you can argue that they’ve waived their right to enforce the provision of the contract in question.
- The other party acted in bad faith: The other party can’t act wrongfully and then try to hold you in breach for your response. For example, if the other party withholds delivery of goods in hopes of getting something additional from you that’s not accounted for in the contract, and as a result you fail to make timely payment, you’ll likely be able to successfully defend yourself against allegations of breach.
Be aggressive in defending against breach of contract allegations
If you don’t aggressively advocate for yourself, then a breach of contract claim can spell bad news for you and your business. Therefore, you need to thoroughly assess the evidence and educate yourself on the law so that you know how to build the effective legal arguments you need on your side.
We know that can be stressful to think about as you’re trying to deal with the day-to-day operations of your business, but that’s why you should consider discussing the matter with your attorney. Hopefully then you’ll be able to proceed with confidence while fully protecting your interests.