Counterclaim for Breach of Contract

190518 — https://www.upcounsel.com/counterclaim-for-breach-of-contract

A counterclaim for breach of contract is used to defend oneself against an opposing party after an initial claim
has been filed.3 min read

A counterclaim for breach of contract is used to defend oneself against an opposing party after an initial claim
has been filed. In other words, it is a claim made by the defendant against the plaintiff, who has accused the
former of breaching their contract. Defendants may make their own claims against the plaintiff.

During the trial, the defendant presents counterclaims in an offensive position, while the plaintiff acts from a
defensive position. In this way, the defendant must provide evidence to prove the counterclaims. The plaintiff's
claim may be nullified if "common law compulsory counterclaims" are proven. If the defendant does not make
these counterclaims, they will be unable to sue on them in a later lawsuit. As an example, if Business A sues
Business B for breach of contract and Business B does not raise any counterclaims, they can not later sue
Business A for fraudulent contractual terms.

Additional categories of compulsory counterclaims exist in certain jurisdictions.

 One example is Rule 13 of the Federal Rules of Civil Procedure, which requires defendants to raise as a counterclaim any
already existing claims they have against the plaintiff, if it "arises out of the same transaction or occurrence", as one of the claims
made by the plaintiff.
 Another category of counterclaim is permissive counterclaim, which concerns matters unrelated to the plaintiff's claims. In just
one lawsuit, parties have the ability to resolve every one of their disputes, whether related to each other or not. If both the
plaintiff's claims and the defendant's counterclaims concern the same fundamental issues, a court will typically address them
both at the same time. If the counterclaims concern significantly different issues, a court will likely choose to deal with them
separately.

Tactical Defenses to a Breach of Contract Claim

Defendants may respond to a breach of contract claim in numerous ways. Some breach of contract defenses
may be tactical (logistical) routes and others may be legal.

For example, delay is often used as a tactical defense, whether to simply frustrate the plaintiff or to buy time in
order to raise legal funds. A defendant may deny that they've received any claims form. This usually means
they have not filed an acknowledgment of service and instead a judgment in default of defense is then issued.
Once the judgment arrives, the defendant may appeal it on the basis that they weren't aware of the
proceedings until then.

Delay is often a risky strategy because the defendant must prove that they never received the claim and must
also present an arguable defense. Courts have recently become stricter with issues of non-compliance, but a
determined defendant may still be able to buy several months of time using this tactic.

Another tactical defense is to claim that the written contract was altered after its signing. It's easy to claim that
a conversation altered the contractual terms in a way that challenges the claim that it was breached at all. In
order for the court to test the truth of this claim, it's necessary to receive oral evidence, which generally cannot
occur until a final hearing (trial). This can take many months to reach. However, if a claim cannot be proven in
trial, it may end up being very costly for the defendant.

A settlement offer may be another tactical strategy for a defendant. Even if it's quite clear that a breach of
contract has occurred, the accurate assessment of damages may be clear. The plaintiff will need to calculate
their loss, which may result in errors. Thus, the plaintiff may claim the defendant owes an incorrect amount.

If the defendant offers to settle for less, it may pressure the plaintiff into accepting. This is because if a case
goes to trial and the plaintiff is granted an amount less than the amount already offered, the plaintiff may end up
paying for both their own costs and the defendant's. However, this does not often apply in small claims cases,
which comprise the majority of breach of contract cases.

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Making a counterclaim will also raise the tension in the case and may cause the plaintiff to carefully consider if
and how they want to proceed. It may even cause the plaintiff to seek an early resolution. However, there are
significant risks and costs associated with raising a counterclaim and it still proceeds, even if the initial claim
has been closed.

If you need help understanding or developing a counterclaim for a breach of contract, you can post your legal
need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on
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Breach of Contract Defenses: Everything you Need to Know

190518 — https://www.upcounsel.com/breach-of-contract-defenses

Breach of contract defenses are legal arguments presented by defendants in response to breach of contract
claims.4 min read

Breach of contract defenses are legal arguments presented by defendants in response to breach of contract
claims. A breach of contract is a failure of one or more parties to meet the terms of a contract. In some
instances, the breach of contract may be argued before a court of law. Typically, in a breach of contract claim,
the plaintiff (the breached party) must prove:

1.the existance of the contract

2.that the plaintiff has satisfied the terms of the contract

3.that the defendant has not satisfied the terms of the contract

4.that the defendant's non-compliance has caused quantifiable losses to the plaintiff (called damages)

Types of Damages
There are three primary types of contract damages, including:

1.Expectation damages

2.Reliance damages

3.Restitution damages

Expectation Damages
Expectation damages are a loss of income incurred by a plaintiff due to a breach of contract. For example, if a
plaintiff expected to receive profits from a sale that could not occur because of the defendant's breach of
contract, the defendant may be assessed damages equal to the plaintiff's expected profits from that sale.

Reliance Damages
Reliance damages represent costs incurred by the plaintiff in executing a contract breached by the defendant.
Costs may include out-of-pocket expenses and opportunity costs incurred by the plaintiff. For instance,
reliance damages may be awarded when a plaintiff purchases materials for a construction project that was not
completed because of the breach of contract.

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Restitution Damages
Restitution damages may represent goods, services, and consideration paid by the plaintiff to a defendant who
breached the contract. The breaching party may be required to restore the goods, services, and consideration
to the plaintiff.

In addition, a court of law may require the breaching party to fulfill one or more terms of the contract, called
specific performance.

Common Defenses to Breach of Contract Allegations

First, a defendant may directly argue against a breach of contract claim. In particular, they can provide a
term-by-term explaination of how they satisfied the requirements of the contract.

In addition, a defendant could also argue that:

1.the breach was minor or mutually agreed upon

2.the contract is invalid

Minor or Mutually Agreed Upon Breaches

A breach of contract that does not cause a plaintiff substative damages and/or does not substatively affect the
contract may be considered a minor breach. Typically, defendants are not liable for minor breaches.

Alternatively, a defendant may argue that the plaintiff intentionally waived his or her right to enforce one or
more terms of the contract. These waivers may be explicitly included in a contract or a defendant may argue
that such a waiver is implicit (e.g., when an excessive amount of time elapses before a plaintiff makes a breach
of contract claim).

In addition, a defendant may argue that a contract has been accepted as performed. This occurs when the
plaintiff accepts either the performance of the contract or a substitute performance as adequate.

Invalidating a contract
Typically, for a contract to be voided, both parties must breach the contract. A defendant could, for example,
argue that he breached the contract as a result of a breach of contract by a plaintiff and/or that the plaintiff had
knowledge of the defendant's breach of contract, but did not attempt to resolve it.

In addition, if a defendant were forced to enter into a contract under duress or if the terms of a contract are
highly one-sided, a court may invalidate the contract. Also, if performing a contract represents an undue
hardship for the defendant or if an event occurs after the execution of the contract that makes performing the
contract impractical, a court may void the contract. Further, if a plaintiff misrepresented a substantive element
of the contract, and the defendant relied on the misrepresentation, the contract may also be voided.

Next, if a defendant lacks capacity to execute the contract (e.g., the defendant is a minor), the contract is
voidable. If either a court of law could not understand the essential elements of a contract or if the defendant
did not consider the contract to be finalized, the contract is also voidable.

In addition, if the contract requires the performance of an illegal action, the contract is voidable. However, in
some courts of law, only the illegal terms of the contract may be voided, while the remaining elements of the
contract may remain in effect.

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Arguments in the Alternative
A defendant may chose to argue in the alternative in a court of law. Accordingly, each defense presented by
the defendant is considered individually, regardless of whether one argument may contradict another. For
example, a defendant may argue that a contract is voidable. The defendant may further argue that he did not
breach the contract. The defendant may conclude by arguing that his breach of contract was minor.

Importantly, in some instances, a defendant may not be permitted to present new arguments after various
points in the court proceedings. Accordingly, it is recommended that a defendant present all arguments at the
outset of a breach of contract case.

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