The Unclean Hands Defense in Breach of Contract Cases

We tend to know that in life, if you expect others to act the right way, you, as well, must also act the right way. The law recognizes this as well, with the doctrine of unclean hands, and when applied, it can be a powerful defense to a breach of contract or other commercial litigation lawsuit.

What is the Unclean Hands Defense?

Put simply, unclean hands means that the party suing has, itself, done something wrong, unscrupulous, or deceitful, and that the party suing thus shouldn’t benefit from or be rewarded by their own unethical behavior.

As a simple example, imagine someone who defrauds you into signing a contract, or perhaps, who breaks a law by even entering into the contract. When you don’t perform, they sue. As the party being sued, you can say that the other side cannot enforce its contract because they have unclean hands.

Or, imagine that an employer wants to enforce some employment agreement against a now-departed employee. But the employee believes the employer broke the law in getting the agreements signed in the first place, or that the employer has been breaching the contracts it now seeks to enforce, all along. The employee can use unclean hands in the lawsuit against him or her to enforce the employment agreement.

Unclean hands, in some way, can be thought of as comparative fault, in an injury liability case, where a Defendant sued for negligence can claim that an injury victim did or didn’t do something that contributed to his or her own accident or injury.

Relation to the Issues in the Case

The actions taken by the party suing that constitute unclean hands, must be related to the lawsuit or the issues in the lawsuit. They can’t just be a “bad person generally,” or be generally engaged in wrongful conduct. After all, the law doesn’t require you to be an angel, just to enforce an otherwise enforceable agreement.

The law also requires that the other side know of, and rely upon, whatever wrongdoing the party suing engaged in, which constitutes unclean hands. In other words, the party asserting the defense must show that it was harmed directly by the wrongdoing.

Used with Other Defenses

Unclean hands often is alleged along with other, similar defenses. For example, if a Defendant did engage in fraud while getting someone to sign a contract, the other side might allege fraud in the inducement as a defense to a breach of contract case, along with unclean hands. Or, if the other side breached the same contract it is seeking to enforce, the party sued might counterclaim for breach of contract, along with alleging a defense of unclean hands.

The unclean hands defense is not an easy one to prove. Courts do require specific evidence of the actions that constitute unclean hands.

Call our West Palm Beach commercial litigation attorneys at Pike & Lustig for help with your commercial litigation case.

Source:

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