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August 26, 2022 Collections

10 Affirmative Defenses to Breach of Contract

Contracts are at the basis of most modern commercial relationships. If an agreement is breached, the non-breaching party has the right to bring a claim to hold the breaching party accountable. At the same time, the allegedly breaching party has a right to raise a defense. Certain affirmative defenses can be raised in breach of contract claims in New Jersey. Our New Jersey breach of contract lawyer highlights 10 affirmative defenses that could potentially be raised in a breach of contract case. 

What is an Affirmative Defense?

As a starting point, it is important to understand what an affirmative defense is and how it works in a legal dispute. As defined by the Cornell Legal Information Institute, an affirmative defense is a type of proactive legal defense whereby the defendant raises evidence that “if found to be credible, will negate liability.” In other words, a defendant that brings an affirmative defense in a breach of contract case essentially acknowledges that they did not live up to the terms of the agreement, but they also present evidence arguing that they should not be found legally liable. 

10 of the Most Common Affirmative Defense in Contract Breach Cases

  • Lack of Capacity to Contract

Lack of capacity to enter a contract is a valid defense in a breach of contract claim. For example, imagine that a low-level employee “agrees” to a contract on behalf of a business. The company could raise an affirmative defense that the employee had no authority to enter such an agreement. 

  • Fraudulent Inducement

The breaching party can raise an affirmative defense in a contract dispute alleging fraudulent inducement. If you were induced to enter the agreement on fraudulent grounds, you have the right to escape liability. 

  • Mutual Mistake

In New Jersey, there must be a “meeting of the minds” for a valid contract to be formed. If the parties made a mutual mistake—and neither party’s interpretation was unreasonable—the allegedly breaching party has an affirmative defense available. 

  • Impossibility

Impossibility in an affirmative defense in a breach of contract claim. You cannot be bound to an agreement that is impossible to perform. Though, in some cases, this defense could still result in the payment of some damages. 

  • Commercial Impracticability 

In some circumstances, changing conditions may not make contract performance altogether impossible, but it may make it commercially impracticable. 

  • Illegal Terms (Unenforceable) 

An illegal contract cannot be enforced in New Jersey. It is an affirmative defense to a breach of contract claim to argue that the contract is fundamentally unenforceable due to illegal terms. 

  • Promissory Estoppel

The legal doctrine of promissory estoppel may be raised as an affirmative defense in a breach of contract claim. The affirmative defense may arise if the defendant relied on certain representations made by the plaintiff. For example, if the plaintiff told the defendant that non-performance was “fine” and that the deal was off, then promissory estoppel may be a valid defense. 

  • Unsatisfied Precedent Condition 

Some contracts require certain conditions to be satisfied before performance is required. A defendant can raise an affirmative defense in a breach of contract claim by providing evidence of an unsatisfied precedent condition. 

  • Statute of Limitations Expired 

In New Jersey, the statute of limitations for a breach of contract claim depends, in part, on the nature of the agreement. The statute of limitations for a contract for the sale of goods is four years (N.J. Stat. Ann. § 12A:2-725). For a breach of contract claim for other types of agreement, there is a six-year statute of limitations (N.J. Stat. Ann. § 2A:14-1). 

  • Contract Was Statutorily Required to Be in Writing 

Oral contracts are legally enforceable in certain circumstances in New Jersey. However, state law holds that certain types of contractual agreements must be in writing to be legally binding. For example, contracts for the sale of real property in New Jersey must be in writing. 

Contact Our New Jersey Breach of Contract Defense Attorney Today

At Snellings Law LLC, our New Jersey breach of contract defense lawyers have the professional skills, legal expertise, and tenacity that you trust in a complex case. If you have any questions about raising an affirmative defense in a breach of contract claim, we can help. Contact our legal team today to schedule your strictly confidential, no-obligation case review. From our Parsippany-Troy Hills legal office, we handle breach of contract cases throughout all of New Jersey.