Business disagreements arise from time to time. Often this involves a vendor or customer not fulfilling the terms of their agreement. The contract breach may involve a lack of services, payment, or not meeting the conditions outlined in the agreement. We talked about how the force majeure clause can protect those unable to fulfill the contract’s terms for reasons beyond their control, but there are other defenses.
Statute of limitations
Many associate this with criminal activity, but there can be a statute of limitations in filing a particular type of civil lawsuit. Although fraud or actions could extend the window, the court may dismiss the plaintiff’s breach of contract claim because they did not file before the statute expired – the window for civil suits are typically six years or less in Massachusetts, but some last 20 years.
Failure of consideration
This may be used as a defense if the plaintiff offered something that is no longer of value or they did not meet certain conditions. If the plaintiff did not make a down payment, they likely do not have a solid case for claiming a breach of contract.
In this case, the defendant basically met the terms of the contract, but the plaintiff alleges non-performance or other issues that have no economic impact. For example, a defendant/vendor may have agreed to create a widget in a specific color, but the final color is similar but not an exact match. The wrong color may have no economic impact on the plaintiff.
Statute of frauds
Sometimes a handshake won’t do. State law requires that some binding contracts must be in writing and signed by the parties. It prevents someone from lying about the conditions of the agreement. There is no disputing the contract requirements because they are in writing and signed. These protocols speed up resolving the matter and protect defendants against unfounded claims made by fraudsters.
Don’t wait until the last minute
Those with questions about a contract or business dispute can consult with attorneys who handle these matters. They can provide clarity on the issue and help the potential defendant by methodically building a strong defense ahead of time, which may even dissuade the claimant from moving forward with legal action.