How to Defend Your Company Against a Breach of Contract Claim in Maryland

There are always two sides to every story. Often times, the party who breaches a contract gets a lot of flak and is ultimately painted as the bad guy who did not fulfill a promise. There are a number of reasons why a company might perform or fail to perform in a way that deviates from the terms of the contract. The breaching party is not always at fault, and that is why it is important for a company being sued for breach of contract to consult with a contractual litigation attorney to avoid loss of finances and resources.

A company who is defending against a breach of contract claim must ultimately prove to a court that the contract it entered into is unenforceable. A skilled and experienced business advisory attorney can help a company understand its best defenses and arguments against a breach of contract claim. The Columbia breach of contract attorneys at the Heyman Law Firm have experience in both filing for breach of contract claims and defending them. Their knowledge of both sides of the fence will be an asset to your company’s claim so that a court does not enforce a contract that you should not be legally bound to.

What Constitutes a Contract?

In order to develop a plan of action for defending against a claim for any business litigation, it is important to understand the basic components of a contract and their functions. There are four essential elements that every contract must have. These are:

1. Offer
2. Acceptance
3. Consideration
4. Mutual Assent

An offer is a promise to act or refrain from acting. When a party unequivocally agrees to the terms of an offer, that constitutes acceptance. After an offeree accepts an offeror’s promise, a contract has been formed. In order for parties to be legally bound to a contract, there must also be consideration. Consideration is the value that each party provides that induces them to enter into a contract. The term “value” is subjective and personal to each party. Finally, there must be mutual assent, meaning that each party must have had the intent to enter into an agreement at the time the contract was formed.

There are three ways by which a party can breach a contract. The specific details of the breach will obviously vary depending on the contract’s terms, but nevertheless, a breach will fall under one of three categories:

1. A party fails to perform as promised
2. A party makes it impossible for another party to perform
3. A party declares that he or she has an intent not to perform (repudiation of the contract)

What are Common Defenses to a Breach of Contract Cause of Action?

There are several affirmative defenses that can be utilized in a breach of contract lawsuit. These defenses are used to provide an explanation as to why a company breached or why a company believes that there in fact was no breach. Some common defenses are:

1. Mutual mistake – In order for this defense to succeed, both parties must have the same mistake in contract terms.
2. Incapacity – This applies when a party did not have the capacity to understand the terms of the contract at the time it was entered into. Examples of this would be if a party was mentally ill or was a minor.
3. Illegality – A contract is considered void and unenforceable if it was for illegal goods or its terms violated any state or federal laws.
4. Unconscionable – When a contract is extremely one-sided or one party has significantly more bargaining power than the other, a court might hold that a contract is unenforceable.
5. The contract was not in writing – Many states hold that in order for a contract to be enforceable, it must be in writing and signed by both parties.
6. Fraud or Duress – If a party was deceived or if terms of the contract were misrepresented for the purpose of inducement into entering into a contract, a court might hold that the contract was not legally binding.
7. Impossibility – A change in circumstances took place after the contract was formed that made performance of the contract by a party impracticable or impossible.
8. Estoppel – A party makes a statement that excused performance of a term of the agreement, and the other party relied on that statement. Thus, if the party later denies the statement and claims there was a breach, a court might hold that the contract is unenforceable.

Contact a Maryland Contractual Litigation Attorney Today

Defending against a breach of contract claim can be a confusing and stressful process. Consulting with an attorney who understands the nuances of laws surrounding contracts in Maryland can help save your company time and money. To schedule a confidential consultation with a Baltimore contract attorney, call the Heyman Law Firm at (410) 305-9287 today.