Challenges You Can Raise to the Validity of an Agreement
In an earlier blog, we identified the elements of a valid contract—agreement, consideration, volition, capacity and legality. There are, however, other argument you can raise to challenge the enforceability of a contract.
Mistake of Fact
Suppose you enter into a verbal agreement for the purchase of a car—you think you are buying the 2018 Mercedes, but the seller thinks it’s the 2015 BMW. Assuming there’s no evidence of any intent by either party to mislead, the mistake may still be sufficient to render the contract unenforceable. The mistake must, however, relate to an essential component of the contract, such that the bargaining process would have been significantly different if both parties had the same understanding.
Impossibility of Performance
There are situations where, subsequent to a valid and enforceable agreement, something happens that makes performance extremely difficult, extremely expensive or simply impossible for one of the parties. For example, suppose you entered into a contract to have your wedding reception at the country club, but there’s a fire a couple days before the event and the reception hall is destroyed. In such a situation, the court may find it unreasonable to require performance of the agreement.
As a general rule, as long as it’s considered an “arms-length” transaction, the court won’t get involved in any consideration of whether or not the deal was fair. However, there are times, such as where it appears that one party had grossly unfair and disproportionate bargaining power, or the other party did not understand the agreement (due to language issues, perhaps), where the court may declare enforcement of the contract to be unconscionable.
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