The three elements of an enforceable contract are offer, acceptance and consideration. Nonetheless, there are times when exigent circumstances such as the parties themselves, the actual acceptance, or the original offer are invalid. Parties have the following defenses regarding an improper offer: misrepresentation, non-disclosure, and unconscionability. Party defenses include minority and incapacity as an accident lawyer can share. Acceptance defenses include duress and undue influence. The catch all defense is that public policy does not support the contract.
Beginning with improper offers, unconscionability, misrepresentation, and non-disclosure all involve the terms of the contract. Unconscionability is a defense that looks at how the agreement was made and what terms were in the contract. Specifically, unconscionability can be a defense to the enforcement of a contract when the contract in question was drafted by individuals with more resources or power than those signing the contracts, or the contracts contain boilerplate terms that leave the signing party no choice but to sign the document or walk away. Misrepresentation focuses on statements made by a party intending to adduce assent from the other party. The statement must be fraudulent or materially incorrect. The limitation on the misrepresentation defense is that the misrepresentation must be a misrepresentation of fact, it cannot be mere trade talk or “puffery.” Non-disclosure is a defense akin to misrepresentation in that it prevents a party from performing when the opposing party failed to reveal a fact that is of material importance to the party accepting the contract.
Party defenses include incapacity and minority. Incapacity is defense that alleges that the party entering into the contract lacked the mental capacity at the time of entering into the contract. In order to prove the incapacity defense, the plaintiff must have medical evidence (i.e., a volitional test) to prove that he or she lacked the mental capacity to enter into the contract. The minority defense has a similar rationale to the incapacity defense. The minority defense provides that a contract in which a minor is a party to remains voidable at the option of the minor, even if there has been full performance. Notably, if the minor, after they reach the age of majority, wants to get out from their contractual obligations, he or she must notify the other party within a reasonable time after turning 18 of their intentions to do so.
Finally, the defenses of duress and undue influence focus on the acceptance of the contract. Duress is often a threat of physical harm, criminal acts, or litigation. By definition, duress includes any wrongful threat that overcomes the free will of a party and leaves that party with an absence of meaningful choice. Undue influence is often found when one party over-persuades or pressures the accepting party. This defense is defined as the use of excessive pressure by a dominant party in overcoming the will of a vulnerable person.
These defenses provide a valuable means to avoid a contract after it has been entered into, but before performance has been made. If you have an issue with a contract and its fulfillment, contact an attorney near you for help.
Thanks to Eglet Adams Eglet Ham Henriod for their insight on the available contract defenses before performance has been rendered.
