Defenses to Breach of Contract

DEFENSES TO BREACH OF CONTRACT

• Plaintiff's claim is that defendant promised to ______, but broke it by doing ______
• Plaintiff will ask for ______remedy, but defendant will try to limit it by arguing ______

CONSIDERATION AS A BASIS FOR ENFORCEMENT

1. Why there is no valid promise or performance
2. Plaintiff did not have good faith and reasonable belief in the possible validity of the claim - Cf. Fiege v. Boehm
3. Illusory Promise: no express or implied commitment - Strong v. Sheffield; cf. Mattei v. Hopper; Wood v. Lucy, Lady Duff Gordon

1. Why there is no valid bargained-for exchange
2. Promise / performance already been received by D, not given in exchange for D's promise - Feinberg v. Pfeiffer
3. Promise / performance not given until after D's promise = not given in exchange - Feinberg, Strong v. Sheffield
4. D's promise was a conditional promise to make a gift - Kirksey v. Kirksey
5. Sham

1. INVALID arguments for why there is no consideration
2. Did not benefit D or impose a detriment on P - Hamer v. Sidway
3. It was less valuable than D's promise - Cf. Fiege v. Boehm

RELIANCE AS A BASIS FOR ENFORCEMENT

1. Why elements of reliance are not proven
2. Would have taken action anyway - Cf. Feinberg v. Pfeiffer
3. Not necessary to prevent injustice - Cf. Feinberg v. Pfeiffer; Cohen v. Cowles Media

MORAL OBLIGATION AS A BASIS FOR ENFORCEMENT

1. Why promise is not enforceable on the basis of moral obligation
2. Promise is not one of the special kinds or promises:
3. Discharged by statute of limitations;
4. Discharged by bankruptcy proceedings; or
5. Voidable because of infancy
6. Won’t enforce promise for recognition of material benefit P conferred on D - Dementas; cf. Webb v. McGowin

RESTITUTION AS A SUBSTITUTE FOR ENFORCEMENT

1. No unjust enrichment at P's expense
2. Volunteer, manifesting no expectation of compensation
3. Officious intermeddler
4. Other remedies - Callano v. Oakwood Park Homes

CONTRACT FORMATION

1. No assent
2. Actually knew or a reasonable person would have known D not assenting to be bound - Cf. Lucy v. Zehmer

1. No offer or acceptance
2. There was no offer - Owen v. Tunison; Harvey v. Facey; Fairmount Glass; Lefkowitz v. Great Minn. Surplus Store
3. Offer lapses before the attempted acceptance
4. Revoked by offeror before the attempted acceptance, no valid option contract - Dickinson v. Dodd
5. Expressly rejected before the attempted acceptance
6. Implicitly rejected because of a counteroffer - Columbus Rolling Mill
7. Terminated before acceptance because offeror died - Earle v. Angell
8. Offer invited acceptance by the rendering of complete performance, and the offeree did not completely perform
9. Invited acceptance by a promise to perform, and the offeree did not make such a promise either with words or implicitly with conduct - White v. Corlies & Tift; Ever-Tite Roofing v. Green
10. Invited acceptance by promise to perform, offeree did not make promise in manner invited by offer - Allied Steel v. Ford Motor Co.
11. Offeror could not insist that silence would be acceptance - Cf. Hobbs v. Massasoit Whip Co.
12. Offer required notice of acceptance and offeree did not provide notice - White v. Corlies & Tift; Ever-Tite Roofing v. Green; International Filter v. Conroe Gin; cf. Carlill v. Carbolic Smoke Ball

1. Too indefinite to enforce
2. Terms of contract are too indefinite to determine what constitutes a breach, or what an appropriate remedy is - Varney v. Ditmars; Toys v. Burlington

STATUTES OF FRAUDS

1. Why promise is unenforceable
2. Falls within the scope of a statute of frauds; requisiteness of writing and signing have not been met, because:
3. There was no writing;
4. Writing does not state the essential terms; or
5. Defendant did not sign the writing

1. Plaintiff's responses – Need A + (B or C) OR A + B + C – Richards v. Richards
2. Promise actually does not fall within scope of any statute of frauds, because, e.g.:
3. Promise does not meet definition of suretyship promise - Langman v. UVA Alumni Association
4. Promise could technically be completely performed within one year - Klewin
5. D is equitably estopped from denying the existence signed writing because he asserted that writing had been made, and P relied on D's assertion
6. Pursuant to the "part performance" exception for land contracts, D may not assert the statute of frauds as a defense because D promised to convey land, and P substantially relied on the promise by:
7. Payment of part of purchase price
8. Taking possession of property
9. Making improvements to property

1. Defendant may not assert the statute of frauds as a defense because P relied on D's promise, and injustice can be avoided only by enforcement of the promise - Monarco v. LoGreco [but not all courts recognize this defense]

POLICING THE BARGAIN

Why promise is voidable/void

1. I was an infant when I made it - Kiefer v. Fred Howe Motors
2. I was suffering from a mental infirmity and as a result could not:
3. Understand the nature and consequence of the transaction - cf. Cundick v. Broadbent
4. Act in a reasonable manner with respect to the transaction, and P had notice of this condition - Ortelere
5. It was induced by an improper threat that left me with no reasonable alternative
6. Unilaterally modified contract, violation of pre-existing duty did not provide new consideration - Alaska Packers
7. Old contract was not canceled before forming a new one, so pre-existing duty rule still applies - Scwartzreich v. Bauman-Basch
8. Modification was not fair and reasonable in light of changed circumstances - Watkins v. Carrig
9. It was induced by
10. A fraudulent or material misrepresentation, and I justifiable relied on it
11. An action intended to prevent me from learning a fact
12. A half-truth - Kannavos v. Annino
13. A non-disclosure of facts, I expected full disclosure based on our confidential relationship
14. A mutual mistake as to a basic assumption that had a material effect, and I did not bear the risk of mistake Sherwood v. Walker; cf. Wood v. Boynton; Stees v. Leonard
15. My unilateral mistake, and enforcement would make contract unconscionable
16. Promise is VOID because it violates a strong public policy, e.g.
17. Middleman should not make excessive profits - Black v. Bush Industries
18. Consumer protection - O'Callaghan v. Walter & Beckwith; Henningsen

ADHESION CONTRACTS

1. Pattern of argumentation
2. P's claim
3. D breached a contact or committed a tort
4. D's defense
5. I am not liable, or my liability is limited, because of an exculpation clause in our form contract
6. P's replies
7. No adequate notice that the form contained contractual terms - Klar v. H&M Parcel
8. Exculpation clause,

• When strictly construed, does not apply to this situation - Galligan v. Arovitch

• Unenforceable because it violates a strong public policy against X - Henningsen

• Unenforceable on grounds of unconscionability because of X

REMEDIES

1. Why plaintiff is not entitled to liquidated damages
2. Liquidated damage is unreasonably large in relation to both actual and anticipated damages and therefore cannot be enforced, as it is a penalty - Dave Gustafson v. State

1. Why plaintiff is not entitled to specific performance
2. Damages would be an adequate remedy
3. Bargain was unfair at time it was made - McKinnon, Tuckwiller

1. Reduce Expectation Damages Because:
2. P could have avoided some of loss - Luten Bridge
3. An incomplete or defective performance
4. For loss in value: cost to complete or remedy is grossly disproportionate to the probable loss in value to P (Jacob & Youngs v. Kent, Peevyhouse v. Garland Coal, cf. Groves v. John Wunder)
5. Loss in value was not foreseeable at the time contract was made because

• Damages did not arise in the ordinary course of events
• No notice of special circumstances giving rise to the damages - Hadley v. Baxendale
• P cannot prove the loss in value or other loss with reasonable certainty - Collatz, cf. Fera v. Village Plaza

1. Otherwise, plaintiff is only entitled to reliance/nominal damages, if anything