What Is a Contract in Texas?
Before there can be a breach of contract lawsuit, there must be a legally valid and enforceable contract.
In the State of Texas, a contract exists if the following elements are present:
- An offer by one party
- An acceptance in strict compliance with the terms of the offer by the other party
- A meeting of the minds
- Consent by each party to the terms
- Execution and delivery of the contract with the intent that it be mutual and binding.
Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555-56 (Tex. App.—Houston [14th Dist.] 2002, no pet.).
Also important in contracts is “consideration,” or something of value exchanged by the parties to “seal the deal.”
Contracts are critically important in business to business (B2B) relations, because contracts solidify the commitments of one business to another to provide something that one business has and the other business needs. Some of the most common subjects covered in a well-written contract, whether between businesses, individuals, or a combination of businesses and individuals, are:
- Quantity of a good or service;
- Timeframe during which the exchange of a good or service will occur (“term”);
- Price for the good or service;
- When the contract will end (“termination”);
- How the contracting parties will legally protect each other (“indemnification”);
- What will happen if part of the contract is breached (“waiver”);
- What will happen if part of the contract is voided (“severability”);
- Where the parties will go if there is a dispute (“choice of venue”);
- What law the parties will follow if there is a dispute (“choice of law”);
- Procedures for protecting each party’s intellectual property;
- Agreements not to compete or help competitors.
Under Texas law, contracts can be verbal rather than written out, but there are several exceptions. The Texas Statute of Frauds governs these exceptions, and requires certain types of contracts be in written form, including:
- Sales of securities, including stocks;
- Marriage certificates;
- Leases for real estate for terms longer than one year;
- Contracts for selling real estate;
- Contracts for selling goods over $500;
- Contracts to assume the duty of another.
What Is a Breach of Contract in Texas?
The Texas breach of contract elements are:
- Existence of a valid contract
- Complete or partial performance by the plaintiff of the plaintiff’s obligations
- Breach by the defendant
- Damages sustained by the plaintiff as a result of that breach.
Winchek v. Am. Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st Dist.] 2007, no pet.).
There are different types of breaches of contract. For example, a breach can be material, meaning that as a result of the breaching party’s failure to perform an aspect of the contract, the other party received something substantially different from what the contract specified. If the non-breaching party was a coffee shop that ordered milk for making lattes, and the breaching party was a distributor who confused the order and delivered fish instead, the breach would be material. This could also be called a “fundamental” breach because it goes to the heart of what the contract was for, the delivery of milk which the coffee shop needed to run its business.
On the other hand, a minor or non-material breach occurs if, even though the breaching party failed to perform an aspect of the contract, the non-breaching party still receives the item or service specified in the contract under other circumstances, such as the milk being delivered to the coffee shop, but a day late, causing a day of black coffee and unhappy customers.
A third type of breach of contract is an anticipatory breach. This is where one party acts or says something that indicates an intention that the party is going to stop performing its obligations under the contract at some point in the future. This would be, using the milk example, the coffee shop saying it was no longer going to pay the distributor for milk deliveries, without giving a reason.
Sample Breach of Contract Petition in Texas
The following PDF is an example of a Texas breach of contract petition.
Defenses to Breach of Contract Litigation
As every breach of contract lawyer will attest, there are defenses to breach of business contract and other contract claims which allegedly breaching parties may try to raise to get out of having to pay damages.
- the contract being void as against public policy;
- the contract being illegal, for example, parties can’t contract to steal something or set a building on fire to collect insurance proceeds;
- performance of the contract becoming impossible or impracticable due to changes in circumstances;
- no consideration (nothing of value exchanged);
- the contract was obtained by fraud;
- there was a mistake between the parties.
Still other defenses are that one party lacked the capacity to enter into a contract, due to age or mental disability. Or, the party who entered into the contract was coerced, or was under duress, or the contract was unconscionable, meaning that the terms of the contract represent a grossly unequal bargaining position held by one party over the other.
For all these reasons, you need a capable breach of contract attorney to represent you no matter what side of a contract action you are on in Texas.
Resolving Breach of Contract Disputes
If you have been involved in a breach of contract, on either side, you will need a contract dispute lawyer with the right knowledge and resources to help protect your rights. Call contract dispute attorney Seth Kretzer today at 713-775-3050 to discuss your case and learn how to file a claim or defend against claims in a breach of contract lawsuit.
Seth is on your side and is committed to helping you get justice. He has experience with Texas contract cases and will strive to give you the best representation possible. He works diligently to understand your situation and will do everything in his power to help you!