Contracts are the foundation of most business and personal transactions. They create legally binding agreements that outline obligations and rights between parties. However, when one party fails to fulfill their obligations, it can lead to a breach of contract. Understanding breach of contract law in Texas is crucial for protecting your interests and pursuing appropriate remedies.
This guide explains the key elements of breach of contract claims in Texas, the statute of limitations, and what you can expect when filing a lawsuit. Whether you’re considering suing for breach of contract in Texas or defending against a claim, this article provides the information you need.
What Is a Breach of Contract?
A breach of contract occurs when one party fails to perform their duties as agreed upon in a contract without a valid legal excuse. Breaches can take several forms, such as failing to deliver goods, providing services below agreed-upon standards, or missing deadlines. In Texas, breach of contract law allows the non-breaching party to seek remedies to address the damages caused by the breach.
Types of Breaches
- Material Breach: A significant failure that undermines the purpose of the contract, allowing the non-breaching party to terminate the agreement and sue for damages.
- Minor Breach: A partial breach where the contract’s primary purpose is still met, but the non-breaching party may seek compensation.
- Anticipatory Breach: When one party indicates they will not fulfill their obligations before the deadline, allowing the other party to sue immediately.
Elements of a Breach of Contract Claim in Texas
To succeed in a breach of contract claim in Texas, the plaintiff must prove four key elements. These elements were clarified in the Texas Court of Appeals case Frost National Bank v. Burge:
- Existence of a Valid Contract – The plaintiff must demonstrate that a legally binding contract existed. In Texas, a valid contract requires:
- An offer
- Acceptance
- A “meeting of the minds” (mutual agreement on terms)
- Consideration (something of value exchanged)
- Execution and delivery with intent to create a binding agreement
- Plaintiff Performed or Tendered Performance – The plaintiff must show they upheld their obligations under the contract or were ready and willing to perform their duties.
- Defendant Breached the Contract – The plaintiff must prove the defendant failed to fulfill their contractual obligations without a valid legal excuse.
- Plaintiff Suffered Damages – Finally, the plaintiff must show that they incurred measurable losses as a direct result of the defendant’s breach.
Remedies for Breach of Contract in Texas
When suing for breach of contract in Texas, the court may award several types of remedies depending on the circumstances of the case. Common remedies include:
- Monetary Damages – The most common remedy for breach of contract is financial compensation. Damages aim to put the non-breaching party in the position they would have been in had the breach not occurred. Types of damages include:
- Compensatory Damages: Cover direct losses and costs.
- Consequential Damages: Address secondary losses caused by the breach.
- Liquidated Damages: Pre-agreed amounts specified in the contract.
- Specific Performance – In cases where monetary damages are inadequate, the court may order the breaching party to fulfill their contractual obligations.
- Rescission – The court may cancel the contract and return both parties to their pre-contract positions.
- Attorney’s Fees – Under Chapter 38 of the Texas Civil Practice and Remedies Code, a prevailing party in a breach of contract case may recover reasonable attorney’s fees.
Statute of Limitations for Breach of Contract in Texas
The statute of limitations for breach of contract claims in Texas is four years. This means you must file your lawsuit within four years of the breach or risk losing your right to pursue legal action.
When Does the Statute of Limitations Start for Breach of Contract?
The clock typically begins on the date of the breach. For example, if a contractor fails to complete a project by the agreed deadline, the statute of limitations starts on that date. In some cases, the discovery rule may apply, delaying the start of the limitations period until the breach is discovered.
How Long Do You Have to Sue for Breach of Contract in Texas?
In most cases, you have four years to file a breach of contract lawsuit in Texas. However, if the contract explicitly specifies a shorter limitation period (no less than two years), the shorter period may apply. It’s essential to act promptly to preserve your legal rights.
How Long Does a Breach of Contract Lawsuit Take?
The duration of a breach of contract lawsuit in Texas depends on several factors, including the complexity of the case, the court’s schedule, and whether the parties reach a settlement. While simple cases may resolve in a few months, more complex disputes can take a year or longer.
Stages of a Breach of Contract Lawsuit:
- Filing and Initial Pleadings – The plaintiff files a complaint, and the defendant responds with an answer or counterclaims.
- Discovery – Both parties exchange evidence and depose witnesses to build their cases. This stage can take several months.
- Settlement Negotiations – Many breach of contract cases settle out of court, saving time and costs.
- Trial – If no settlement is reached, the case proceeds to trial, where a judge or jury determines the outcome.
- Appeals – Either party may appeal the decision, potentially extending the timeline further.
Contract Defenses in Breach of Contract Cases
Defendants in breach of contract cases may raise various defenses to dispute the claim, including:
- Lack of Valid Contract: Arguing that one or more elements of a valid contract are missing.
- Performance Excused: Demonstrating that external factors (e.g., force majeure) prevented performance.
- Fraud or Misrepresentation: Claiming the plaintiff induced the contract under false pretenses.
- Plaintiff’s Breach: Asserting that the plaintiff failed to fulfill their own obligations under the contract.
Practical Tips for Preventing Breach of Contract Disputes
To minimize the risk of contract disputes and breaches, consider these best practices:
- Draft Clear Contracts – Use precise language to outline obligations, deadlines, and remedies for non-compliance.
- Include Dispute Resolution Clauses – Specify how disputes will be handled, such as mediation or arbitration, to avoid lengthy lawsuits.
- Communicate Regularly – Maintain open communication with all parties to address potential issues before they escalate.
- Document Everything – Keep thorough records of contracts, communications, and performance to support your case if a dispute arises.
Why Work with an Experienced Breach of Contract Attorney?
Understanding and navigating breach of contract law in Texas can be challenging, especially when disputes arise. Whether you’re pursuing a claim or defending against one, having an experienced legal team on your side is critical.
At Roquemore Skierski Business Lawyer, we specialize in breach of contract cases, offering personalized guidance and effective representation. Our attorneys will help you understand your rights, build a strong case, and pursue the best possible outcome. Don’t let a breach of contract jeopardize your business or personal interests.
Contact Roquemore Skierski Business Lawyer today to discuss your case and find out how we can help you protect your rights under Texas law.
