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What are common defenses to a contract action?

  1. Fraud and coercion

  2. Breach by the other side and incapacity to contract

  3. Failure to comply with regulations

  4. Insufficient evidence and misrepresentation

The correct answer is: Breach by the other side and incapacity to contract

In contract law, common defenses to a contract action often focus on the validity and enforceability of the contract itself. The option that identifies breach by the other side and incapacity to contract correctly highlights two significant defenses. When one party breaches a contract, the non-breaching party may be unable to claim damages or enforce the contract against the breaching party. This defense pivots on the recognition that if one side has not upheld their end of the agreement, the other side's obligations may be challenged. The defense of incapacity refers to the legal principle that certain individuals, such as minors, mentally incapacitated persons, or intoxicated individuals, may lack the ability to enter into a legally binding contract. If a party can demonstrate they lacked capacity at the time of the contract's formation, they often can render the contract voidable, thus providing a solid defense against the contract action. Understanding these common defenses helps clarify the complexities of contractual obligations and the circumstances under which a party may not have to uphold their part of an agreement.