Clean Hands

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The legal term clean hands refers to a defense in a civil lawsuit regarding a contract, which allows a defendant (the person being sued) to claim that the plaintiff (the person suing) has engaged in wrongdoing. If the defendant is successful in proving the plaintiff had unclean hands through bad or illegal behavior, the plaintiff would not be able to obtain a remedy from the court. To explore this concept, consider the following clean hands definition.

Definition of Clean Hands

Noun

  1. A doctrine in equity lawsuits that bars a plaintiff from obtaining judicial relief in a matter in which he is not free of guilt, or does not have “clean hands.”

What is Clean Hands Doctrine

The clean hands doctrine, also referred to as “unclean hands,” or “dirty hands doctrine,” is an affirmative defense to a claim for equitable relief. Such relief is usually sought in the form of specific performance, or an injunction. In defending such a lawsuit, the defendant argues that the plaintiff should not be given relief by the court because he acted in bad faith, or unethically, or even illegally, in regards to the subject of the lawsuit. The legal basis for the clean hands doctrine lies in the concept that those who seek equity must do equity.

What is Equitable Remedy

In a civil lawsuit, an equitable remedy is a remedy, or resolution, that does not involve the payment of monetary damages. Equitable remedies usually include such things as the issuance of an injunction, or the requirement that a party to a contract perform something specific pertaining to the contract (called “specific performance”).

Claiming Unclean Hands

There is not a specific definition of what behavior constitutes unclean hands, as it depends on the specific circumstances of the contract or transaction, and each party’s behavior. What is required to prove that a party had unclean hands varies by jurisdiction, making it important to consult with an attorney experienced in contract law.

Types of Contract Claims under Clean Hands Doctrine

The doctrine if unclean hands may only be used as a defense in claims of equity – which are claims in which the court seeks to make things equal or fair, though not by ordering the payment of damages. There are three types of equitable relief that may be sought in a contract claim:

  1. Contract Reformation – Modification or rewriting of the old contract to either reflect changes, or to clarify misunderstandings.
  2. Contract Rescission – Cancellation of the old contract, and creating a new one.
  3. Specific Performance – An order for a party to the contract to perform his duties under the contract.

In a lawsuit over a contract, the plaintiff might ask the court to order one of these three forms of relief – and the defendant may claim a defense that the plaintiff has unclean hands, or that he engaged in some type of wrongdoing. However, the plaintiff may raise the argument of unclean hands as well, claiming that he is entitled to relief because the defendant acted with unclean hands.

Required Elements of a Clean Hands Defense

The required elements to proving a clean hands defense vary, and the possibilities are broad. An action may be considered to go against the clean hands doctrine if it violates what the average person would consider to be of “good faith or conscience.” A few examples of actions that may be considered to be unclean hands include:

  • Failing to perform one’s duties under the contract
  • Using coercion or intimidation to get the other party to sign the contract
  • Obtaining a favorable offer, or acceptance of an offer, by use of fraud, threats, or violence
  • Dishonestly or fraudulently representing the contents of the contract
  • Committing a crime in connection with some aspect of the contract

Example of Clean Hands Defense

John, owner of ABC Avionics, is approached by Bill, who is an executive of small airline company who proposes that ABC sell him airplane parts at half of the wholesale price. In order to induce John to approve, Bill hands him an envelope containing photos of John going into a motel with someone other than his wife.

John, understanding the inherent threat that those photos would be made available to his wife, signed a contract with Bill to supply his company with parts at half of wholesale. This quickly becomes a burden, as at that price, ABC is taking a loss on every part. After a few months, John backs out, refusing to honor any new parts orders under the contract, and Bill files a civil lawsuit asking the court to force ABC to honor the contract.

John, as owner of the company, appears at court, defending his actions under the clean hands doctrine. He tells the court how he was coerced into signing the contract, even showing the judge the photos Bill had given him. In this example of clean hands doctrine, where Bill knowingly strong-armed the contract, it is unlikely that the judge would enforce the contract. It is far more likely that the contract would be nullified.

Clean Hands Example in Wine Dispute

Kendall-Jackson Winery, a California winery, had a reputation for producing fine wines at mid-price. In the early 1990s, the company sold over $100 million each year, and its chardonnay was the number one seller in the U.S. At the same time, Gallo Winery was the largest producer of non-premium, low-cost wines in the nation. When the bottom fell out of the low-cost wine industry in the late 1990s, Gallo stepped up its game, entering the premium wine market.

The makeover included the new name “Turning Leaf,” the logo featuring a leaf design theme, that did not contain the name Gallo. This design was very similar to the marketing logo owned by Kendall-Jackson, used on their Vintner Reserve line. Kendall-Jackson filed a civil lawsuit for trademark infringement.

The court, however, found in Gallo’s favor, then Gallo filed a lawsuit claiming malicious prosecution, and intentional interference with contract against Kendall-Jackson. Gallo claimed Kendall-Jackson’s prior lawsuit was filed without probable cause, and for the purpose of harassing Gallo. Kendall-Jackson asserted a defense that Gallo’s complaint should be barred by the doctrine of unclean hands.

To prove its unclean hands defense, Kendall-Jackson claimed that Gallo engaged in unethical conduct, having employees and retailers move its wines next to Kendall’s wines in order to attract potential buyers to Gallo’s lower price wine, and provided testimony of Gallo employees to prove it. Kendall-Jackson also claimed that Gallo employees or representatives actually moved Kendall’s wines, and even removed Kendall-Jackson wines from some retail stores – all of which is in violation of federal and state regulations.

Gallo filed a motion for summary judgment on Kendall-Jackson’s unclean hands claim, which was granted, as Kendall-Jackson had no evidence of unclean hands in relation to the breach of contract or malicious prosecution claims. Although Kendall-Jackson required more time to get the evidence, the court refused.

Kendall-Jackson appealed that decision, and the appellate court determined that the summary judgment had been granted in error, as Gallo had failed to prove that it was entitled to the judgment. In its ruling, the Court described the clean hands defense, saying:

“The defense of unclean hands arises from the maxim, ‘He who comes into Equity must come with clean hands.’ … The doctrine demands that a plaintiff act fairly in the matter for which he seeks a remedy. He must come into court with clean hands, and keep them clean, or he will be denied relief, regardless of the merits of his claim.”

The Court explained that the clean hands doctrine does not deny relief to a party who has committed any misconduct in the past, but only misconduct that is directly related to the issue for which he seeks relief. The question then became whether Kendall-Jackson’s affirmative defense of unclean hands – to Gallo’s malicious prosecution claim – should be limited to misconduct that affected Kendall-Jackson’s decision to file the prior lawsuit.

In this example of a clean hands dispute, the Court ruled that it should not – that the “… misconduct in the particular transaction or connected to the subject matter of the litigation that affects the equitable relations between the litigants is sufficient to trigger the defense.” The appellate court issued a writ of mandate ordering the trial court to vacate its order granting summary judgment.

Related Legal Terms and Issues

  • Affirmative Defense – The introduction of evidence in a trial that would negate, or “cancel out,” the defendant’s civil or criminal legal responsibility for the alleged act.
  • Appellate Court – A court having jurisdiction to review decisions of a trial-level or other lower court.
  • Civil Lawsuit – A lawsuit brought about in court when one person claims to have suffered a loss due to the actions of another person.
  • Defendant – A party against whom a lawsuit has been filed in civil court, or who has been accused of, or charged with, a crime or offense.
  • Injunction – A court order preventing an individual or entity from beginning or continuing an action.
  • Plaintiff – A person who brings a legal action against another person or entity, such as in a civil lawsuit, or criminal proceedings.
  • Specific Performance – An equitable remedy in which the court compels a party to a contract to perform duties agreed to in the contract.
  • Writ of Mandate – A court order to another court, or other government agency, to follow the law to correct some prior actions, or to cease illegal acts.