Denials, defences, and damages-limiting rules in breach of contract

Abstract

ABSTRACT The role of defences in breach of contract has been historically under-addressed: most treatises do not have a section dedicated to defences, and writers often doubt the utility of defences terminology. In this article, I argue that our understanding of breach of contract actions will be improved if we recognise that there are three types of arguments that can be made to escape the liability to pay damages for breach: denials, defences, and damages-limiting rules. Denials negate one or more of the elements of the action, defences are liability-defeating reasons external to the action, and damages-limiting rules affect the defendant’s liability to pay damages once a claim has been made out against them. After justifying this taxonomy from practical and philosophical perspectives, I then categorise several contract doctrines accordingly. By classifying doctrines in this way, the taxonomy can better illuminate the individual doctrines and the role of defences in contract more generally.