Recognizing Common Contract Defenses - dummies

Recognizing Common Contract Defenses

By Scott J. Burnham

A contract defense is any legal challenge to a contract’s enforceability. Following are common contract defenses:

  • Illegality: The agreement itself is illegal or violates public policy.

  • Unconscionability: The agreement is so one-sided that it shocks the conscience of the court.

  • Mental incapacity or incompetence: One of the parties had a mental illness or incapacity at the time of contract formation.

  • Party was a minor: A party was not of legal age (younger than 18 years).

  • Fraud: A party made an affirmative misrepresentation or failed to disclose something that he or she was required to disclose.

  • Duress: One party made an unlawful threat to the other, giving that person no reasonable alternative but to enter into the contract.

  • Undue influence: A dominant party used an inappropriate method of persuasion to convince a weaker or more vulnerable party to enter into a contract against his better judgment.

  • Mistake: The parties entered into the agreement with a belief that was not in accord with the facts, and the belief goes to a basic assumption of the contract and is material.