Contracts-Defenses of Contracts
There are several other defenses that can conceivably be asserted to a claim to enforce a contract. For instance, if one of the parties was a minor or suffering from mental incompetency at the time, then those facts may be defenses to the validity of the contract. This defense is called lack of capacity to contract. Likewise, if there was a mutual mistake by the parties, then that could void a contract on the theory that there has been no meeting of the minds and therefore no agreement.
Example: A mutual mistake might arise in a circumstance in which the seller offers to sell his 1964 Cadillac that is parked in front of his home and the purchaser agrees to buy the 1964 Cadillac parked in front of the home. However, it turns out that there were in fact two 1964 Cadillacs parked in front of this home and the parties were referring to different vehicles when they entered into what they thought was their agreement. In that type of circumstance, there has been no meeting of the minds because the parties were mutually mistaken as to which vehicle was being sold.
It is not unheard of that in the course of defending a contract claim, the defendant may claim that he or she was induced to enter into the contract due to fraud on the part of the other party. Fraud can be loosely defined as a misrepresentation of a material fact.
Example: You want to buy a house. You ask the sellers whether they have ever had a wet basement. The sellers tell you that they have never had a wet basement even though they know full well that it is untrue. That misrepresentation may constitute fraud.
If you then proceed to buy the house, based upon the false representation and find out after the sale that in fact the basement does leak, then you may sue the sellers for the fraud. To make your claim, you must have been induced to enter into the contract and to have suffered certain damages. In this case, you bought a house that was faulty and therefore, worth less than what you paid.
Other conceivable defenses to a contract claim could come in the formof duress, undue influence, impossibility, and frustration. Duress is simply a threat or perceived threat to induce a party to enter into a contract. If someone puts a gun to your head and makes you sign a contract, that contract is not enforceable because you were operating under duress. Duress may also come in a number of other forms that may be considerably more subtle.
Undue influence arises when certain persons may have a great deal of control over a party and utilize that control in order to unduly influence a person to enter into a contract.
Example: Betty holds a power of attorney for her next door neighbor who is 94. The power of attorney authorizes Betty to conduct all of the financial affairs for her neighbor. If Betty encourages her next door neighbor to sign a contract selling his home for $100,000 under market value, that would be an example of undue influence. It would be a basis for setting aside that contract of sale.
Impossibility arises where it truly becomes impossible to perform a contract due to something that is unforeseen by the parties. For instance, the destruction of the World Trade Center made the performance of the leases for that building impossible. A related concept is that of frustration of purpose. For instance, during the inauguration of a new president, there may be certain contracts entered into. If the inauguration, however, is canceled, then the purpose of those contracts has been frustrated. If you were one of the suppliers who agreed to provide the grandstands for the inauguration, the U. S. Government may be able to void the contract with you since the inauguration is not going forward.
Most contracts can and should be brief and straightforward.
If you have ever read a multi-page contract drafted by an attorney, you probably found it to be a nightmarish experience. Although complicated business transactions call for contracts that are precise and complex, most contracts can and should be brief and straightforward. To the extent that there is any ambiguity in a contract, typically that ambiguity is interpreted against the party that drafted the contract.
