What is an Affirmative Defense?
An affirmative defense, in the context of a breach of contract claim, is a legal argument that attempts to absolve your business of liability for a violation of the existing contract. If successful, an affirmative defense can alter an otherwise valid claim into one in which no damages are owed. Affirmative defenses also sometimes refer to procedural arguments which to try to get rid of the entire claim. A successful affirmative defense may overcome the allegation even if the facts are not disputed. It is a present, independent reason why the alleged unlawful conduct is legally justified . However, an affirmative defense cannot be proven solely by the defendant’s argument that s/he did not violate the contract. Rather, an affirmative defense justifies the conduct at issue. Examples of some common affirmative defenses to a breach of contract claim include: Because an affirmative defense does not contest the underlying contractually-violative behavior but instead offers a legally-protective reason for the same, it must be in writing and in response to an asserted claim. An affirmative defense is usually named as a separate heading in the answer to a complaint.
Examples of Affirmative Defenses to a Breach of Contract Claim
There are numerous affirmative defenses to breach of contract. This section looks at the most commonly used affirmative defenses to breach of contract.
Impossibility of Performance
One of the affirmative defenses to breach of contract is impossibility of performance. A party’s performance may be excused if it is impossible to perform the duties under the contract. For example, if the contract states that the subject matter of the contract was to be performed in a certain location, and that location now no longer exists or is unavailable, this is an affirmative defense to breach of contract. If performance was not physically possible, then you have an affirmative defense to breach of contract. Further, if an additional act is required and the act is impossible to perform or for some other reason not possible, then this is an affirmative defense to breach of contract.
Duress
Another affirmative defense to breach of contract is duress. The law allows people to rescind a contract if they entered into the contract due to improper threat or economic coercion. If the wrongful threats of one party (i.e., physical harm or damage to property) cause the other party to enter into a contract, and the agreement is not one that the person would have entered into but for the wrongful threat, then you have an affirmative defense to a breach of contract.
Fraud
Fraud is another affirmative defense to breach of contract. If you entered into the contract due to fraud (misrepresentation) of another, you can rescind the written contract. If the other party made misrepresentations of material fact, which induce the rescinding party to enter into the contract, this is an affirmative defense to breach of contract.
Mistake
Similarly, if there was a mistake in entering into the contract, this is also an affirmative defense to breach of contract. If both parties were mistaken as to the material facts or if you were the only one mistaken, the contract can be rescinded. If you can show that you were mistaken about the contents of a contract, then you have an affirmative defense to breach of contract.
How to Prove Affirmative Defenses
To prove an affirmative defense in a breach of contract case, the defendant must have sufficient evidence to support the basis of his or her defense. This is generally a lower threshold than the standard for proving up underlying facts related to the cause of action asserted by the plaintiff. For example, if the affirmative defense at issue is that the plaintiff fraudulently induced the defendant to enter the contract, the plaintiff’s misrepresentation, intent to mislead or deceive, justifiable reliance, and resulting damages must be proven through admissible evidence that substantiates each of the elements of the fraud offense, as codified in California common law and California Civil Jury Instruction ("CACI"). In this example, the defendant’s burden is to produce evidence of claimed affirmative defenses, rather than "disprove" the plaintiff’s allegations that fraud was not committed.
In California, and elsewhere, the burden of proof in civil actions is on the complaining party, and unless otherwise provided by statute or agreement, this burden does not shift. If the defendant pleads an affirmative defense that defeats plaintiff’s claim, the defendant has the burden of proof (also referred to as burden of persuasion) with respect to that affirmative defense. (Civ. Proc. Code § 397 ["The burden of proof lies on the party holding the affirmative of the issue."].) The defendant bears the burden of establishing each element of the asserted affirmative defense in the same way the plaintiff does with respect to a cause of action. (See, e.g., Lifetime Hoan Corp. v. Davis (2010) 190 Cal. App. 4th 550, 559 [stating that the party relying on the doctrine of laches must prove all of the elements by a preponderance of the evidence].) The burden placed on a defendant to prove an affirmative defense is subject to division of the burden. (See CA Civ. Code § 3548 ["In case of doubt, the law assists the debtor or obligor."].) The defendant generally has the burden of proof of a contractual affirmative defense, "i.e., whether the contract was partially or fully performed, breached by plaintiff, or terminated for cause." (Osumi v. Sutton (1989) 211 Cal. App. 3d 11, 33.) Once the defendant produces sufficient evidence of the affirmative defense, the burden shifts to the plaintiff to then prove each element of the cause of action against the defendant. The plaintiff must rebut the elements of the affirmative defense by a preponderance of evidence. (Hot Rods v. N. Propeller, Inc. (2007) 154 Cal. App. 4th 1242, 1253.)
When a responsive pleading is filed, defendant’s motion may be heard on 35 days’ notice. (See CA Civ. Proc. Code § 1005(b)(2) [unless otherwise provided by statute in a particular case, the notice of a demurrer, a motion to strike, or a motion for judgment on the pleadings must be served at least 16 court days before the hearing].)
Recent Cases Involving Affirmative Defenses
Case Study 1: Accrued Damages
In Kim v. Regents of University of California, a medical student was dismissed from the university for academic dishonesty in his advanced surgery course, as well as for unprofessional conduct. In his breach of contract case against the university, the student raised an affirmative defense of waiver, claiming that the university had waived the right to enforce the academic standards by not enforcing them in the past. The court agreed that it could not be held responsible for the university’s failure to act on previous occasions and therefore dismissed the student’s cause of action for breach of contract. This case is a clear application of the waiver defense. Essentially, the plaintiff is arguing that by failing to exercise its rights in the past, the defendant has "given up" the right to now enforce its legal rights. While this may seem unfair to the defendant, the plaintiff is arguing that fundamental fairness should also be taken into account and that he should not be punished for an expectation he had created by the defendant’s own actions.
Case Study 2: Duress
In the case of Seitz v. Rent-A-Center, the plaintiff accepted a promotion to store manager under the condition that he forfeit his right to sue the company for any workplace issues , including harassment or discrimination cases. The plaintiff argued that he did not voluntarily enter into this agreement and that he felt extreme pressure by the company to sign the agreement, constituting duress and making the agreement void. The court, however, disagreed and found in favor of the company, reasoning that the plaintiff had never been put in a position where he could not say "no" to the agreement. The key to this case was the fact that the men were not in a situation where their choice could have meant the difference between life and death, nor was the plaintiff asked to take a beating or something of physical nature. Rather, the option to accept the agreement was truly an employment decision- the plaintiff could choose to sign it, or he could not; the choice was his. Essentially, the defense of duress means that a contract has been signed against a person’s will, making it ineffective. While the plaintiff in this case failed to convince the court that his free will had been overridden, a party who has cohabitated with another while the other party was beating him or her, or while his life was threatened in a dramatic way may have a better case for a duress defense.
Obstacles to Asserted Affirmative Defenses
While affirmative defenses are an important part of a successful defense to any breach of contract case, they must be properly raised to be effective: In the United States, a party that intends to assert an affirmative defense must state such defense in a pleading or other document, or otherwise waive the defense by failing to assert it in a timely manner. In the federal court system, Federal Rules of Civil Procedure, Rule 8(c)(1) states "[i]n responding to a pleading, a party must affirmatively state any applicable defense…".
State laws vary on how and when affirmative defenses are to be raised. However, a common rule is that amendments to a pleading will be permitted if the other side will not be prejudiced by the amendment, if the motion is timely filed and if the defense is not interposed in bad faith. Alternatively, courts generally do not allow affirmative defenses to be added once discovery is over and a case is set for trial. A failure to timely raise an affirmative defense can result in a waiver of the affirmative defense under the legal theory of estoppel. Simply stated, estoppel is a legal principle that prevents an individual from asserting legal claims after another individual reasonably relied upon the first person’s actions or inaction to their detriment.
The legal doctrines of laches and waiver provide additional support for preventing a party from raising an affirmative defense, including waiver of a statute of limitations defense. Waiver is the voluntary relinquishment of a legal right, and in the breach of contract context includes waiver of the statute of limitations. Laches is most often applied to cases where a plaintiff has acted in a dilatory fashion but can also apply to a defendant who has unreasonably delayed in enforcing his legal rights. Laches is applied when the defendant’s unreasonable delay has prejudiced the plaintiff.
Helping Clients Establish Affirmative Defenses
As you can see from above, affirmative defenses cover anything from consent, to statutes of limitations, to estoppel. Even if you had absolutely no intention of offending any of the affirmative defenses listed above, you may still waive them if they are not affirmatively pled in your responsive pleading to a complaint . These defenses are technical and require an attorney experienced in litigating civil actions, especially breach of contract lawsuits. For that reason, it is extremely important that you obtain the assistance of skilled legal counsel if you believe an affirmative defense applies to your situation.