If your business is involved in a dispute or has been sued, it is imperative that you understand how to defend and protect your interests.

Let’s review legal defenses that are commonly used to defend small businesses against breach of contract claims. You may find that one or more of these defenses apply to your situation.

Implied Covenant of Good Faith and Fair Dealing

The implied covenant of good faith and fair dealing requires all parties of a contract to adhere to the contract’s original purpose. It’s a defense that is relied on in many contract disputes. In Florida, the court has made it clear that this defense cannot negate the terms of a valid contract.

Unconscionable Contract Terms

A contract is considered unconscionable when the terms are unjust or unfair. In Kohl v. Bay Colony Club Condominium, Inc., 398 So. 2d 865, 868 (Fla. 4th DCA 1981), the Florida court held that when the terms of the contract are unfair and unreasonable at the time the contract was entered into, unconscionability can be used as a legitimate defense to a breach of contract claim.

Statute of Limitations

There is a limited period of time in which you can bring forth a breach of contract action. In Florida, a breach involving a written contract must be filed with the court within five years. If this does not happen before the time period expires, the injured party can be permanently barred from recovering damages for any of its losses.

Impossibility of Performance

If you are unable to perform as per a contract due to circumstances beyond your control, this is referred to as “impossibility of performance.” In Home Design Center Joint Venture v. County Appliances of Naples, Inc., 563 So. 2d 767, 770 (Fla. 2d DCA 1990), the court established impossibility of performance as a legitimate defense to some breach of contract claims.

Above is merely a partial list of defenses that are used in breach of contract lawsuits. If your company has been accused of failing to fulfill the obligations of a contract, consult a knowledgeable contract attorney to discuss how to best defend your company. You may find additional defenses available to you that are not covered in this article.

Contact our contract lawyers to discuss how you can defend your company against breach of contract claims.

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