Many businesses—likely even most businesses—rely on contracts to conduct their business. Unlike personal relationships, most business relationships involve contracts. Even retail stores, which for the most part have no formal contracts with their customers, rely upon contracts with wholesalers. The corner convenience store doesn’t have contracts with the people who walk in to buy a soda or a hot dog, but it has contracts with the companies that supply the store with the sodas and the hot dogs. Breaching those contracts—by either party—can have devastating consequences for both businesses involved.
Have you been affected by a breach of contract? Attorney Andrew Weisblatt can potentially help you get recompense to make your business whole. Contact our office at (713) 666-1981 to speak with Mr. Weisblatt about your case and learn what can be done.
How Does a Contract Breach Impact a Business?
Businesses rely on predictability. Certainly, you cannot predict some things with total accuracy, such as how much of a certain product people will buy a year from now. But businesses have to make predictions of that kind every day. They take into account current economic conditions, expected future economic projections, and the like, to build a model of their business needs in the coming months.
Based on those projections, a business enters into contracts with other businesses, either to obtain the products or services they need for their business or to provide another business with products or services necessary for that business to operate. Whether the product is machine parts, raw materials, or a service such as payroll processing, businesses enter contracts to buy or sell those products and services to ensure that they will have a source or a purchaser that will enable them to continue operating.
If one party breaches the contract and declines to provide the product or services contracted for—or declines to purchase the product or services—the business on the wrong end of that breach is left in the lurch. Suddenly it’s left without a provider of something necessary to continue its business or, just as bad, left without a purchaser of the goods or services the business sells. This can result in a major disruption to a business, with at least some revenue suddenly and unexpectedly cut off because the business is left without a crucial element of what it needs to sell its products or services, or is cut off from a market where it sells its goods or services. Either way, the business is left scrambling to find a new source or market necessary for its continued economic survival.
Houston-area businesses have been putting their affairs in the hands of attorney Andrew Weisblatt for decades. They trust him, and so can you.
What Can You Do If Another Business Breaches a Contract?
Obviously, if a business breaches a contract with your business by declining to perform according to the terms of the contract, you can sue. Initially, of course, you will be scrambling to replace whatever business necessity the breached contract was supposed to provide so that you can stay in business. Suing is cold comfort even if you win, if you lose your business because of a breach of contract by one of your suppliers or purchasers. Assuming you are able to keep your business going, what can you hope to gain through a lawsuit?
If you prevail on a breach of contract action, the law is intended to put you back in the economic position in which you would have been had the contract been performed according to its terms. You can achieve this through damages awards in a number of forms, including:
- Liquidated damages, based on a contract term or sometimes by a court judgment
- Specific performance, where the court orders the breaching party to perform based on the terms of the contract.
- Consequential and incidental damages, including foreseeable losses caused by the breach
- Compensatory damages, which reimburse actual provable losses.
There are other forms of damages available, and Texas law also allows recovery of attorneys’ fees if you win your breach of contract action and recover damages.
What Is Considered a Breach of Contract in Texas?
For a breach of contract to occur, a valid contract must have existed in the first place. In Texas, a contract is valid when several conditions are met, including the following:
- The parties mutually assent to the terms of the contract.
- Consideration is exchanged for goods or services.
- The contract is not illegal or criminal.
- Clear times, dates, and locations are mentioned.
Once a lawyer determines that a valid contract exists, the next order of business is to decide whether a breach has taken place. This is done by carefully analyzing the contract terms to determine whether each party has upheld their end of the contract by fulfilling their obligations. Failure on your part to discharge your contract duties could run counter to your lawsuit for breach of contract.
Finally, a breach of contract must involve compensable damages. In other words, your business must have suffered some sort of harm recognized by law. A breach without harm is not actionable. Common types of harm businesses face after a breach of contract include:
- Loss of revenue
- Delayed performance of contractual duties with others
- Loss of reputation
- Loss of future revenue or business
- Civil liability
- Criminal liability.
Each of these results can effectively cripple a business temporarily and for the long term. Effective action is crucial to limit any breach of contract blowback.
Ultimately, however, prevention is the most effective way to deal with breach of contract. Attorneys can develop and put in place measures and practices that help businesses avoid breach of contract issues. Attorneys can also spot these concerns from a mile away and take preemptive action as they begin to develop.
If Someone Breached a Business Contract with You, Consult a Houston Business Lawyer
If you believe that someone with whom you have been doing business has breached a contract, the lawyers of Weisblatt Law Firm, LLC, can help. Weisblatt Law Firm routinely represents clients who are involved in business disputes and can help you with yours.
Has your business experienced the effects of a breach of contract by another party? If so, the time to take action is now. Weisblatt Law Firm is prepared to fight to hold the breaching party accountable and make things right. Call (713) 666-1981 for a free phone consultation or contact us by way of our online contact form.
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio
