Articles Tagged with defenses

An often-invoked defense to an action for breach of contract is to claim that the contract cannot be enforced by a party who committed the first material breach. Significantly, the rule does not bar recovery unless the prior breach goes to the “root of the contract.” If both sides breach but neither breach is particularly severe, the contract will normally be enforced albeit with appropriate offsets. A recent application of this rule comes from a recent Virginia Court of Appeals opinion in Inviting Structures, Inc. v. Royal, where the court held that the first-material-breach rule did not bar either party’s recovery.

The case arose from a $232,180 landscaping contract between Inviting Structures, Inc., d/b/a State of the Art Landscape (“SOTAL”), and homeowners Margit Royal and Jerry Wolford. SOTAL agreed to build a bluestone terrace, patio, and steps; plant a Japanese garden according to a detailed landscape plan; install lighting; accept delivery of a copper spa tub from the manufacturer and install it on the property; and build a structure to house the spa tub’s mechanics. The homeowners would pay on a draw schedule tied to project milestones: a $60,000 deposit, $60,000 after concrete subslabs were poured, $60,000 after veneer stones were laid, $40,000 after the spa tub was delivered, and $12,180 after planting was completed. The contract also contained a change-order provision requiring that any modifications be in writing and either signed by both parties or approved via email.

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So you got sued for breach of contract. There’s no need to panic. Your legal rights may include a number of valid defenses to the claim, some of which may not be readily obvious. Knowing when to assert these defenses can make the difference between losing a large monetary judgment and getting the case dismissed at the outset. Before you write the plaintiff a check in whatever amount is being demanded in the lawsuit, consider whether one or more of these contract defenses may apply to your situation. There may be perfectly valid reasons why you don’t actually owe that money.

Void or Voidable Contract

A void contract is considered a nullity and has no legal effect. A contract made in violation of a Virginia statute, for example, would be illegal and therefore void. For example, contracts for the payment of interest on a loan will be deemed void if the interest rate is unlawfully high. (See Va. Code § 6.2-303). A plaintiff who brings an action based on a void contract is not entitled to recover damages, even if that contract was breached. A void contract can’t be validated or ratified. A voidable contract is one that starts off as a valid, legal contract, but which permits one or both of the parties to disaffirm or otherwise avoid the obligations created by the contract.

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