There are many defenses that can be used to dispute the claim that a contact has been breached. In some cases, a party can claim that a valid contract was never formed because one or more of the requirements of an enforceable contract – offer, acceptance and consideration – have not been satisfied. In other instances, a party may assert an affirmative defense, which can excuse the breach due to other circumstances. The party who asserts an affirmative defense has the burden of proving that defense at trial.
Statute of Frauds. Arizona’s statute of frauds provides that certain contracts must fulfill specific requirements to be enforceable. Under this statute, these contracts must be evidenced by some type of writing and the writing must be signed. The writing requirement does not state that the whole contract be written. It simply requires some type of written memorandum that provides evidence of a transaction. The signature requirement is generally interpreted broadly as well. Contracts that fall under the statute of frauds include: contracts to sell or lease property for one year or more, contracts to pay the debts of another person, contracts to sell goods in amount equal to or exceeding five hundred dollars, and contracts that cannot be performed within a year.
Contractual capacity. At the time the contract is formed, the parties must be of sound mind and of age to enter into a contract. This defense can be used when a party can demonstrate that he did not understand his actions when entering into a contract or was mentally incapacitated in some way.
Mistake. If a party can establish that there was an error made with respect to one or more terms of the contract, then mistake may be a valid defense to a breach of contract. A mistake in this context is some type of mistaken belief about certain facts at the time that the contract was formed. A mistake can be either unilateral or mutual in nature.
Duress or undue influence. When a party involuntarily enters into a contract through force or other wrongful means, then the court may determine that the contract is not valid by reason of duress. Similarly, when one party applies an inordinate amount of influence over another party, such as in a fiduciary relationship, then the contract may not be binding because of the exertion of undue influence.
Misrepresentation and fraud. A contract that is based on fraud or misrepresentation will often be deemed invalid. When one party intentionally misrepresents a matter in the contract, the court may find that fraud has been committed. Alternatively, misrepresentation is the inadvertent misconstruing of a material fact that was intended to persuade the other party to take certain actions.
There are many other defenses available to excuse the nonperformance of a contract. Discuss your claim with an attorney familiar with contracts to learn more about your options under Arizona law.
Chernoff Law handles business and real estate litigation matters throughout Arizona. Contact us by calling 480-719-7307 to discuss your legal matter.