What Arguments Can You Make to Legally Challenge a Contract?
In an earlier blog, we looked at the elements that must be present to create a valid and enforceable contract—agreement, consideration, legal subject matter, contractual capacity and volition. Obviously, if you can show that one of those requirements is missing, you can challenge the validity of the contract.
There are, however, other defenses that you can raise to challenge the enforcement of a contract:
- The statute of frauds — Every state, including Pennsylvania, has a written law known as the “statute of frauds,” which identifies those types of contracts which must be in writing. Accordingly, oral agreements may be enforceable, provided they don’t fall under the types of contracts enumerated in the statute of frauds. For example, in Pennsylvania, contracts involving an interest in real property must be in writing.
- Mistake of fact — Suppose you agree to buy a historical artifact and it turns out not to be genuine. If the mistake is unilateral—made by only one party—the doctrine of caveat emptor (let the buyer beware) typically prevents the contract from being voided. However, if the mistake is mutual, and the mistake is about a “material” fact (one that’s essential to the nature of the contract), the agreement may be voided.
- Impossibility of performance — If some unrelated and unforeseen circumstance makes it unreasonable or impossible for one of the parties to perform under the terms of the agreement, the courts will typically allow the contract to be invalidated without penalty. For example, if you enter into a contract to buy a used car and it is totaled before you pay for and take possession of it, the agreement may be voided and the seller won’t be in breach of contract.
- Unconscionability — Though our legal system encourages “freedom of contract,” allowing parties to enter into agreements that may not be in their best interests, the courts still want to know that all transactions are “arms-length,” and that one party does not have grossly disproportionate bargaining power over the other.
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