Common Defenses to the Enforceability of a Contract

In an earlier blog, we identified the specific elements of a valid and enforceable contract:

• An agreement
• Supported by consideration
• Voluntarily entered into
• By persons with contractual capacity
• With a subject matter that is legal

Let’s look a little closer at the defenses you can raise to the enforceability of a contract.

The Contract Was Entered into because of a Mistake

This defense may be raised when there is some misunderstanding with respect to the subject matter of the contract or the duties to be performed. Suppose you are looking to buy a painting and visit a gallery. There are two Renoirs hanging next to each other—you make an offer on “painting A,” but the dealer thinks you are making the offer on “painting B.” The two have a significantly different value and one of you will be disappointed if the sale is required to go through. As long as there’s no evidence that either party intentionally misled the other, the mistake may be sufficient to void the contract.

Impossibility of Performance

If circumstances arise, which are generally out of your control, and make performance impossible, a contract may be voided. Assume, for example, that you agree to deliver 10,000 units of a specific part by June 1, but a storm damages your plant on May 30. If it’s impossible to complete production by the contractual date, the contract may be voided.

Unconscionability

As a general rule, the parties to a contract are permitted to make bad bargains. However, if the court determines that one party had an unfair bargaining advantage or power over the other, the contract may be voided. This rule has limited application, only applied in situations where one party has all or almost all the bargaining power, or where one party lacked the ability to understand the nature and terms of the contract.

Contact Attorney Howard N. Sobel

At the office of Howard N. Sobel, we provide comprehensive bankruptcy counsel to individuals throughout the state of New Jersey. Contact our office online or call us at 856-424-6400. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.