Breach of Contract and Resulting Damages

If only life were that simple. Often, people don’t keep their promises. Merchants don’t deliver goods as ordered. Contractors don’t finish the job properly. Customers don’t pay their bills on time. Sometimes, the law excuses the failure to keep a promise. Often, however, the failure to keep a promise can lead to a lawsuit for breach of contract. Whether you have been accused of breaching a contract or think that someone else has breached their contract with you, the litigation attorneys at REIDDENNISFRICK can help you understand your rights and your remedies and guide you through the litigation process.

Types of Contracts

Not every promise creates a contract enforceable by law. For example, a friend’s promise to help you paint your fence or to give you his old iPhone, without more, does not give you the legal right to enforce that promise. Whether a promise is legally enforceable requires knowledge of contract law.

Texas law does not require every contract to be in writing. In general, an oral agreement is just as enforceable as a written one, although there are exceptions. In some cases, an enforceable contract can be implied from the acts and conduct of the parties or by law. It is important to contact an attorney with experience in contract law to help you understand your rights in your particular situation.

Written Contracts

Many contracts are written. In particular situations, a written agreement is required by law to make certain contracts enforceable. Reading a contract, and understanding what it says, are important steps in determining your rights. Often, what a party said cannot change the terms of a written contract. Sometimes, however, contract terms are not enforceable as a result of statutory law or public policy. In other cases, contract terms can be implied even though they are not written down. An experienced contract attorney can help you navigate each of these situations.

Oral Contracts

Unless the law requires a written agreement in a particular situation, oral contracts are generally enforceable. The first challenge is determining exactly what was agreed. Typically, an oral contract can be proven by what was said and done by the parties. Other documents, including electronic documents like emails and text messages, can help to show the agreed terms of an oral contract. As with written contracts, terms can be implied by law even when the parties did not explicitly discuss them. Our litigation attorneys can help you prove the terms of your oral contract to protect your rights.

Implied Contracts

Commerce is routinely conducted every day without the niceties of making explicit contractual agreements. Consumers drop dry cleaning off or pick up a few items at the store without even contemplating that they are making and performing a contract. Businesses likewise often provide goods or services, or participate in transactions without any structured written or oral agreement. In many circumstances, the existence of a contract is implied by law, with custom and industry standards supplying important terms. Even if you didn’t sign or say anything, it may be important to consult a contract attorney to determine your rights and obligations.

Breach of Contract

A failure to perform a promise as agreed can be a breach of contract. Some breaches are material and can excuse future performance by the other party. Other breaches are not material but can nevertheless give rise to a claim for damages. The nature of the breach in the context of the contract as a whole impacts what defenses may be available as well as what remedy is appropriate.

Written contracts often specify a party’s rights, obligations, and remedies in the event of a breach. In many circumstances, a party is required to give notice of the breach and an opportunity to cure before making a claim for damages. The parties’ agreement may prohibit or limit certain types of damages, or may provide for specific liquidated damages in the event of a breach. The contract may select a particular forum or venue for the resolution of any dispute, including court in another state or arbitration.

It is usually best to consult an experienced attorney as soon as possible if you think there has been a breach of contract. Statutes and previous cases may specify actions you must or may take in order to enhance your position or to recover certain types of damages. Whether you are the breaching party or the non-breaching party, you will want to discuss your rights, possible defenses, obligations, and available remedies to formulate the best possible strategy for your particular situation.

Defenses to Breach of Contract

In many contract cases, the party accused of a breach will dispute the existence of an enforceable contract. Sometimes, there is question as to what exactly the party promised to do. In some instances, the terms originally agreed upon by the parties are subsequently modified either expressly or by the parties’ course of dealing. Other times, a party will maintain that he did perform the contract as agreed.

Even when a party has breached a contract, there are many defenses available to excuse the party’s failure to perform. A particular promise may be illegal. The contract may have been entered into as a result of fraud or duress. Performance may be waived either expressly or by a party’s actions. One party’s performance may be conditioned upon the other party performing their end of the bargain first. Performance may become impossible or much more expensive than originally contemplated due to an unforeseen change of circumstance.

One common defense is that the other party breached the contract too. When another party commits a material breach of a contract, such breach can excuse performance by the other party of its promise to perform. A breach that is not material, however, does not excuse performance, but may give the other party certain legal rights to remedy the breach.

Remedies for a Breach of Contract

The goal of contract law is to put the non-breaching party into the same the position he would have been in had the contract been performed as agreed. What that means in a given situation depends upon the nature of the contract involved as well as particular facts and circumstances. Usually, the remedy for breach of contract is the payment of a sum of money as compensation. This sum of money may be the dollar value of what the non-breaching party was promised in the contract, or the out-of-pocket losses sustained by that party.

Certain types of contracts may justify the remedy of specific performance. In such cases, the breaching party may be ordered to perform the contract as agreed. In other situations, a party may be entitled to rescission of the contract. In instances where a mistake has been made in the preparation of a written agreement, reformation may be available to correct the mistake. Some contracts may be enforceable by an injunction. When the construction or validity of a contract is in question, a court might grant declaratory relief concerning the rights, status, and legal relations of the parties to the contract.

Although Texas generally follows the “American Rule” that parties to a lawsuit must pay their own attorney fees, statutes modify this rule in many contract actions so that the prevailing party often can recover its attorney fees from a party who has breached its contract. On the other hand, exemplary or punitive damage are not recoverable in a suit for breach of contract. Even liquidated damages agreed to in advance by the parties cannot unfairly penalize a party but must be a reasonably just forecast of fair compensation.

Particular Types of Contracts

The litigation attorneys at ReidDennisFrick are experienced with a wide range of contracts, including:

• Real estate deeds, contracts, and leases
• Construction contracts and subcontracts
• Company, partnership, and shareholders agreements
• Insurance policies
• Sales of goods
• Lending transactions
• Employment agreements
• Capital equipment leases
• Arbitration agreements
• Non-disclosure and non-compete agreements
• Service contracts
• Franchise and distributorship agreements
• Guaranties and sureties
• Investment contracts
• Transport contracts and bills of lading
• Corporate debentures

There are many other common types of contracts with which our litigation attorneys have experience. Some contracts are highly specialized, and we can tell you whether you need a more specialized lawyer. Other contracts may be uncommon or unique to the parties involved. Our litigation attorneys can tell you whether we have the experience and background to help you with your contract litigation problem.

“A man’s word is his bond.”