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Contracts serve as the foundation of business relationships, outlining mutual obligations and expectations. However, even carefully crafted contracts can encounter challenges, leading to breaches. In the context of contractual disputes, parties often deploy various defenses to protect their interests. Below, we discuss five common defenses to breach of contract.

1. Anticipatory Repudiation:

Anticipatory repudiation occurs when one party explicitly communicates their intention not to fulfill their contractual obligations before the performance is due. In such cases, the other party may choose to treat the contract as breached and seek damages immediately. However, it’s crucial to establish that the communication was a clear and unequivocal declaration of non-performance.

2. Impossibility of Performance:

The defense of impossibility arises when unforeseen circumstances make it objectively impossible for a party to fulfill their contractual duties. These circumstances must be beyond the control of the party claiming impossibility and not due to their negligence. Common examples include natural disasters, governmental actions, or the death of a person necessary for performance.

3. Breach by the Other Party:

A defendant may argue that the plaintiff breached the contract first, releasing them from their own obligations. This defense often requires a detailed examination of the contract terms and the timeline of events leading up to the dispute. Substantial breaches by the other party that significantly impact the contract’s essence may justify non-performance as a response.

4. Duress or Undue Influence:

Contracts must be entered into freely and voluntarily by all parties involved. If one party can prove that they signed the contract under duress or undue influence, the contract may be deemed voidable. Duress involves coercion or threats, while undue influence often implies a relationship where one party exerts excessive pressure on the other.

5. Lack of Consideration:

For a contract to be valid, there must be mutual consideration—something of value exchanged between the parties. If one party does not provide consideration (performance or the promise of performance), the other party may use this defense to challenge the contract’s enforceability.

Familiarity with these defenses is helpful when navigating a potential contract dispute.  Each case is unique, however, and legal advice should be sought to protect a party’s interests and make the most informed decisions in the event of a breach of contract.