What Is a Breach of Contract in Texas and What Remedies Are Available?

If you own a business, you know the importance of having well-written contracts with the parties with whom you work. But a contract is only useful to the extent that the parties abide by their promises and duties under it. A breach of contract could throw the other party’s entire operation could into chaos.

Fortunately, parties can take legal action to be compensated for the losses they incur. It’s essential to understand not only what constitutes a breach of contract but the remedies available for dealing with it. The Oracle Legal Group takes a look at what your organization needs to know.

Our Houston business lawyers can help you draft contracts and represent you in a contract breach case.

Basic Elements of a Contract Breach

Not every broken promise to do something will support a breach of contract claim. To successfully assert this, the plaintiff has the burden of proving the following elements:

  • The existence of a valid contract.
  • The plaintiff performed or tendered performance as required under the contract.
  • The defendant breached the contract by failing to perform as agreed.
  • Because of the breach, the plaintiff incurred damages.

What Makes a Contract Valid?

Many plaintiffs overlook the first requirement, assuming that any promise necessarily constitutes a contract. However, several elements must be demonstrated to the satisfaction of a court before the existence of a contract is proven. They are:

  • One party makes an offer.
  • The other party accepts the offer, not varying the terms or making acceptance conditional upon different terms.
  • The agreement represents a meeting of the minds between the parties.
  • There is a communication that the parties consent to the agreement terms.
  • The resulting contract is executed and delivered to the parties with the intent that it becomes mutually binding.

Additionally, certain contracts must be in writing to be enforceable. Finally, the contract must not be for something illegal. If you have questions about whether your contract is valid, ask a Houston business attorney.

Hand showing words Breach of Contract

What Sorts of Damages and Other Remedies Are Available in a Breach of Contract?

The type and amount of damages potentially available depend largely on the individual circumstances of the breach. The nature of the contract, its terms, and the consequences of the breach will affect the outcome. The non-breaching party may be entitled to such damages and remedies as:

  • Compensatory Damages: the most common remedy, which is the money needed to cover losses stemming from the breach.
  • Consequential Damages: These cover foreseeable damages resulting from the breach, such as future revenue the contract would have brought in.
  • Specific Performance: If money damages are insufficient, a court may require the breaching party to fulfill their contractually agreed obligations.
  • Rescission: This allows the parties to cancel the contract and return to where they were before entering into it.
  • Restitution: If benefits or property were transferred to the breaching party, it can be returned to the non-breaching party.
  • Liquidated Damages: The contract may include terms that specify what the damages will be in the event of a breach.
  • Attorney’s Fees: Texas law allows the prevailing party in some cases to recover reasonable court costs and lawyer fees.

Don’t Wait Too Long to Take Action

It’s important to understand that if a breach has occurred, the other party doesn’t have unlimited time to respond. There is a four-year time limit, known as a statute of limitations, to file a lawsuit. After this date, you won’t be allowed to claim damages against the breaching party.

Let the Oracle Legal Group get to work representing you. Give our Houston business lawyers a call today at 832-291-2798 for a free consultation.