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Updated by Archer Law on Jun 15, 2018
Headline for 5 Defenses to a Breach of Contract Lawsuit in New Jersey
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5 Defenses to a Breach of Contract Lawsuit in New Jersey

Breach of contract disputes can vary, depending on the circumstances. In some cases, the contract may be comprehensive and unambiguous and leave little room for interpretation with regard to the duties of each party. In other cases, the defendant may have to show that outside circumstances rendered the contract impossible to satisfy. In NJ and elsewhere, there are a number of defenses you can use to prevent the attachment of liability in a breach of contract lawsuit.

1

Anticipatory Breach (Repudiation)

In some circumstances, a contracting party may be justified in failing to adhere to the terms of their contract. More specifically, a contracting party is entitled to breach their agreement in anticipation of a breach by one of the other parties. Once a party clearly and unconditionally demonstrates that they will not perform their duties and obligations under the contract, the other parties are entitled to breach ahead of time.

Suppose, for example, that you are involved in a buyer-supplier contract with the plaintiff where the plaintiff must deliver raw materials to your factory before a specified date. The plaintiff claims that you have breached the contract by terminating it ahead of time, before the plaintiff has made the delivery. You can avoid liability if you can show that the plaintiff called you or emailed you and explained that they would be unable to make the delivery before the specified deadline (thus violating their duties under the contract).

2

Contract is Invalid

the contract is invalid, then its terms cannot be legally enforced — in other words, the plaintiff cannot recover damages for breach of contract if the contract itself has no validity. As the defendant, proving that the contract is invalid is a useful tool for avoiding liability, but you’ll have to be able to show that:

• You did not have the mental capacity to contract at the time of the contract’s execution;
• You were under duress when the contract was executed;
• The contract is unconscionable;
• The contract involved an illegal purpose;
• There was not proper consideration; or that
• There was no offer and acceptance (no “meeting of the minds”).

It’s worth noting that, even if you can prove that the contract is invalid, there may still be limited damage liability. For example, if the contract is invalid due to their not being adequate consideration, the plaintiff can still recover damages if they can show that your promises caused them to reasonably suffer losses (i.e., commit financial resources to fulfilling their duties under the invalid contract).

Contract invalidity and other defenses require skillful navigation of the particular facts of your case. Make sure to get in touch with an experienced New Jersey breach of contract attorney for further guidance.

3

Breach Was Immaterial to the Contract’s Purpose

In New Jersey, breach of contract will not lead to liability if you can prove that the breach was immaterial. Only material breach gives rise to damages. Breach is “material” when it prevents the contract from being completed, or when it destroys the purpose of the contract.

Suppose that you have entered into a contract to distribute food to a local retailer. The contract describes the food containers to be delivered as “red” in color. When you deliver the food to the retailer, however, the containers are “blue.” Everything else about the food and the delivery satisfy the terms of the contract.

If the plaintiff attempts to sue you for breach, you could likely avoid liability by arguing that the breach was immaterial to the purpose of the contract — the containers themselves were not to be displayed to customers, and further, their color was not used for any internal coding/stocking system. It is irrelevant to the true purpose of the contract, which was to have the food delivered in a timely manner to the target retail location.

4

Circumstances Made Performance Impossible

In some cases, circumstances outside of your control (and wholly unexpected) may render performance impossible. For example, suppose that you are delivering goods to a retailer under contract, and — unexpectedly — a team of robbers holds up the truck and steals the goods. You can avoid liability, so long as you show that your actions were reasonable given the circumstances.

5

Contract Was Modified or Performance Was Waived

Contracts may be modified by both parties, implicitly or explicitly. You cannot be held to the duties and obligations of the original contract if such duties were affected by subsequent contract modification.

For example, suppose that you are the developer in a commercial construction project. When the contract is first executed, the project is intended to be finished within a year. Delays in the project (on both sides) force both parties to agree to an additional year extension. The project is eventually completed within two years, at which point the plaintiff sues you for breaching the original contract — you could avoid liability by introducing evidence that the contract was modified and the new terms accepted by both parties.