If you find yourself in a business agreement, the first thing to determine is whether the promises will be considered an enforceable contract under the law. While most contracts involve promises to fulfill a duty or refrain from doing something, you must remember that not all agreements are valid contracts. So how does the California law determine which agreements are enforceable? And what are the possible defenses to breach of contract claim?
How to Establish a Breach of Contract Claim in California
In California, the state courts usually require four elements to establish a valid claim for breach of contract:
- Existence of a valid contract
- Plaintiff’s performance or defendant’s excuse for nonperformance
- Defendant’s act of breaking the terms set on the contract
- Resulting damages
Now, if one party refuses to follow an agreed-upon obligation or fails to uphold the agreement’s intended objective, breaches may take place. In the business context, breach of contract ranges from straightforward cases, like one party failing to settle the payment to a sale agreement, to more complex circumstances, such as a breach of investment securities agreements.
Can You Defend a Breach of Contract Claim in California?
If a court determines that a contract exists, it will search for evidence as to its validity and enforceability. There are several reasons a court might not enforce a contract. These are “defenses to the contract,” and lawyers can use these to protect people from instances of unfairness. If there’s a valid defense to a contract, that agreement may be voidable. That can allow the defendant to cancel or revoke the contract.
It’s best to consult with a business litigation attorney in California if you’re facing a breach of contract issue. An experienced lawyer can help explore whether you have a valid defense.
What Are the Valid Defenses to Breach of Contract Claim in California?
Capacity to contract
A contract is not possible unless one has the legal ability to be bound by one. This legal ability is called the “capacity to contract” in California. An individual who’s unable to understand what they’re doing when signing a contract may lack the capacity to contract. For instance, a person under legal guardianship due to mental illness lacks the capacity to contract. So, any agreement they signed is void. In other cases, an individual may not completely lack the capacity to enter an agreement. Still, that agreement can be voidable once the person proves their incapacity.
Capacity to form an enforceable contract
The court looks at multiple factors to determine whether the defendant could form an enforceable contract. For example, a contract entered into by a minor can be canceled by the minor or their guardian. And even if that person reaches the age of 18, they still have a reasonable period to cancel any agreement they entered into as a minor. But if they fail to revoke that agreement within that period, the court may consider it ratified, binding, and enforceable.
How about entering a contract while drunk or under the influence of drugs? Is that contract enforceable? It depends. Courts are generally not sympathetic to individuals who claim they were intoxicated when they entered a binding agreement. But a court will likely void a contract if it finds that the other party or plaintiff took advantage of an intoxicated person. The same goes if the defendant was proved to be involuntarily intoxicated when they signed the said contract.
Signing under duress or misrepresentation
Coercion or false statements by the plaintiff to the defendant during the contract signing could be a valid defense against a breach of contract claim.
If you want to claim the defense of signing under duress, you must show that you were induced by a serious threat, blackmail, or any wrongful action. You must prove to a court that you had no reasonable alternative but to sign the agreement.
When it comes to the contract defense of misrepresentation, you should focus on proving dishonesty in bargaining. It may be a false statement or deliberate withholding of information.
Consult with Our Business Litigation Attorneys in California.
Facing a breach of contract issue is a serious matter. It’s best to seek legal advice, so you know the next steps you should take. Reach out to our business litigation lawyers in California. We’ll help explain which parts of the contract are enforceable. And we’ll guide you on how you can claim a defense against the breach of contract claim against you. Request a free consultation with us today.