Draft Statement Of Defense

---
name: draft-statement-of-defense
task_id: arbitration-international-dispute-resolution/draft-statement-of-defense
description: Ensures a statement of defense addresses procedural termination issues, applies any contractual liability limitation, corrects damages methodology where pricing tiers are involved, and includes a duty to mitigate analysis.
activates_for: [planner, solver, checker]
---

# Skill: Statement of Defense and Counterclaim

## 1. Subject-matter triage (only if applicable)

- Treat the Request for Arbitration, contract, termination notices, pricing schedules, correspondence, and loss materials as the operative record.
- If the claimant entity, assignment chain, or group structure is unclear, test standing and capacity before engaging the merits.
- If there are multiple alleged breaches, loss periods, pricing tranches, or counterclaim components, map them separately before drafting.

## 2. Failure modes the skill is correcting

- Defending the alleged breach without first testing whether the contract-required notice-and-cure sequence was satisfied, missing a threshold procedural defense
- Accepting the claimed quantum without checking whether a liability cap, exclusion, or allocation clause narrows recoverable loss
- Using the claimant’s damages math without testing whether the contract price structure, volume bands, or tiered pricing mechanics require a different calculation
- Omitting mitigation, so the defense fails to reduce recovery for losses that were avoidable after the alleged breach
- Treating repeated acceptance of performance as irrelevant, when waiver or estoppel may undercut the asserted default or termination theory
- Failing to challenge whether the named claimant is the proper party to assert the claim or counterclaim in its own name
- Drafting a counterclaim that states grievance but not causation, measure of loss, or a coherent damages theory
- Stating legal conclusions without anchoring them to the governing contractual clause, arbitral rule, or applicable doctrine

## 3. Legal frameworks / domain conventions that apply

- Contractual termination mechanics: test any notice, breach specification, cure period, and election-to-terminate requirement against the governing agreement before addressing substantive breach
- Liability limitation and exclusion clauses: identify the scope, carve-outs, and aggregation rules; then measure pleaded loss against the contractual ceiling and exclusions
- Damages methodology in supply disputes: where the contract uses tiered, tranche-based, indexed, or volume-dependent pricing, the loss model must follow the contractual pricing architecture rather than a simplified single-price assumption
- Duty to mitigate: apply the general contract-law mitigation rule recognized in leading common-law authorities, and test whether reasonable substitute sourcing, rescheduling, resale, or operational adjustments were available
- Waiver and estoppel: assess whether a course of performance, acceptance without protest, or inconsistent conduct defeats reliance on the asserted non-conformance or default
- Standing and capacity: confirm that the claimant is the contracting party or otherwise has a valid basis to sue, and challenge authority to claim where the entity chain is uncertain
- Counterclaim pleading norms in arbitration: state the contractual or factual basis, causation, legal theory, and relief sought with enough specificity to support arbitral directions and quantum relief
- If the arbitration agreement or procedural rules identify mandatory pleading standards, relief categories, costs treatment, or joinder limits, align the draft with those rules

## 4. Analytical scaffolds

1. Identify the governing contract provisions first: dispute resolution clause, termination clause, liability clause, pricing clause, set-off or netting language, mitigation-related provisions, and any notice requirements.
2. Test the termination pathway as a threshold issue:
   - Was breach notice given?
   - Was cure opportunity afforded?
   - Was termination timely and contract-compliant?
   - Did prior conduct waive strict enforcement?
3. Analyze merits only after the procedural defense is framed, so the response does not concede an invalid termination sequence.
4. Identify the operative damages regime:
   - contractual measure, if any
   - limitation or exclusion language
   - interest, costs, and currency provisions
   - aggregation or per-claim treatment
5. Rebuild the damages analysis from the contract outward:
   - identify the relevant pricing tier or volume band
   - test the claimant’s chosen benchmark against the contract text
   - adjust for actual volumes, timing, offsets, and any contractually required assumptions
6. Assess mitigation:
   - what steps were reasonably available
   - what steps were actually taken
   - how any omission affects recoverable loss
7. Test standing and proper party status:
   - contracting entity
   - assignment or novation
   - affiliate or parent involvement
   - authority to claim on behalf of others
8. Build the counterclaim as a separate cause of action:
   - breach or other wrongful act
   - factual chain of causation
   - quantifiable loss
   - relief sought, including any declaratory, monetary, or set-off relief
9. For every legal proposition used in the draft, cite the controlling authority by name and section, article, rule, or leading doctrine rather than stating conclusions in the abstract.

## 5. Vertical / structural / temporal relationships (only if applicable)

- Sequence the defense so threshold procedural points come before merits, and merits come before quantum.
- Separate past performance issues from post-termination conduct; they often affect different defenses and different damage periods.
- If the record contains multiple periods or shipment batches, analyze each period on its own terms before synthesizing the overall position.
- Distinguish claimant loss from respondent counterclaim loss, and do not merge them into one net narrative unless the governing framework requires it.
- Where the contract has layered pricing or performance obligations over time, align the damages analysis with the same temporal layers rather than a single blended figure.
- If multiple parties are involved, state each party’s role at each relevant stage instead of using collective labels that obscure liability allocation.

## 6. Output structure conventions

- Draft the primary deliverable first and ensure `statement-of-defense.docx` is created, populated with operative text, and not merely a placeholder or summary.
- Use a conventional arbitration pleading structure:
  - title and caption
  - preliminary statement or introduction
  - jurisdiction and applicable rules, if needed
  - factual background
  - defenses on liability and procedure
  - damages and quantum objections
  - counterclaim
  - relief sought
  - reservation of rights
- Organize defenses by issue, with separate subparts for termination procedure, liability limitation, damages methodology, mitigation, waiver/estoppel, standing, and any other record-supported defense.
- When challenging quantum, state the contractually correct measure, the defect in the claimant’s method, and the corrected approach in clear sequence.
- Keep the counterclaim distinct from the defense; include a factual basis, legal theory, causal chain, and remedy sought.
- If multiple alleged breaches, pricing periods, or loss components exist, draft them as separate subsections rather than one blended narrative.
- Use precise arbitral pleading language; avoid argumentative surplus that does not advance a defense, jurisdictional point, or quantified counterclaim.
- Confirm the final file exists and contains the operative pleading text before finishing.