Contesting Contracts

Sometimes a contract is made, and then one or more parties to the contract decide that the contract was unfair in some way or that they should not be required to perform it. A party may have a defense to a contract, meaning that they can refuse to honor it. If they are sued, they can argue to a court that they should not be held liable for breach of contract. Some of the defenses to contracts are merely restatements of the requirements for making a contract. For example, the defense of duress (see below) is a consequence of the requirement that a contract be an agreement between the parties.

Duress is an overcoming of the will by force or other means. A contract made under duress can be voided. Since the victim of the duress did not consent to entering into the contract, one of the key elements in the making of a legal contract is missing. For example, if a person holds a gun to your head to get you to sign a contract, the contract is not enforceable.

Fraud and misrepresentation are defenses to a contract. Misrepresentation is a false statement about a present or past material fact relied on by the other party to the contract. A misrepresentation is interpreted as an innocent misstatement of a fact whereas a fraud is a deliberate misstatement of a fact. In the case of a misrepresentation, the injured party may rescind the contract. In the case of a fraud, the injured party may rescind the contract and sue the wrongdoer for damages. For example, if another person sells you a table, telling you that it is a valuable antique made in the year 1800 and the person knows that it is an ordinary table made in 1950, they have committed a fraud and you may rescind the contract. That is, you can return the table and get your money back. You may also be able to sue for other damages resulting from the transaction. You may also have other remedies under the law of consumer fraud.

Mistake occurs where one or both parties to the contract believe a fact to be true when it is not true. If one party makes a mistake, the error is called a unilateral mistake. Generally, this type of mistake does not invalidate the contract, because the law does not excuse negligence or inadvertence. For example, if you sell somebody a table that you think is an ordinary table made in 1950 for a few dollars, and it turns out to be a valuable antique made in the year 1800, the law will not ordinarily invalidate that contract. However, if the other party to the contract induced the mistake, then the injured party may rescind the contract.

If both parties to a contract make a mistake, the error is called a bilateral mistake. This type of mistake generally voids the contract because there was no meeting of the minds or consent.

Lack of consideration is a defense in a contract action because consideration is ordinarily required for an enforceable contract. For this reason, a promise to make a gift is ordinarily not enforceable. However, if another person acts in reliance on your promise to make a gift, the promise may become liable under principles of promissory estoppel or detrimental reliance. For example, if you promise to donate a million dollars to your college to build a library, and the college builds the library, you may be required to make the gift. The law assumes that the building of the library in reliance on your promise serves as the consideration for the promise to make the gift. Additionally, in some states, a promise to make a gift to a charitable organization is an enforceable promise even if there is no consideration.

The Statute of Frauds may be a defense to some kinds of contracts. The Statute of Frauds requires certain kinds of contracts to be in writing, and provides that a contract of that type that is not in writing is not enforceable. However, the Statute of Frauds may not be a defense to an unwritten contract if one of the parties has relied on the contract to his detriment.

Contracts Message Board for more help