Without contracts, successful business relationships would be virtually unheard of. Contracts clearly outline each party’s rights and obligations, defining the business relationship and specifying how disputes should be handled. Unfortunately, breaches of contract do happen, and it’s wise to know what to do in case your business is affected. Here’s a look at some common types of contract breaches in Texas.
If you’re affected by a breach of contract, you have legal recourse. A business lawyer can help you understand your options and make a plan for how to proceed.
Types of Contract Breaches in Texas
Contract breaches come in varying levels of severity. Depending on how serious the breach is, you may have the right to terminate the contract, seek damages from the offending party, or both.
Material Breach
A material breach of contract is the most serious type. It involves one party acting in a way that very clearly violates the contract and undermines its value. For example, imagine you make leather products for a living. You have a contract with a supplier to deliver raw materials at regular intervals. The supplier completely fails to deliver the leather you need, leaving you unable to make products and therefore unable to earn income.
Because a material breach is extremely disruptive, you can generally legally terminate the contract and seek damages. In the above situation, you might attempt to recover compensation to make up for the income you lost as a direct result of the supplier’s not fulfilling its obligation.
Minor Breach
Sometimes, the other party will violate a contract in a way that is disruptive but not significantly so. For example, if you own a restaurant and your supplier often makes deliveries a day or two late, the supplier has committed a minor breach of contract. In the event of minor breaches, you can often seek compensation, but you can rarely terminate the contract.
Anticipatory Breach
In some instances, it might become clear in advance that one party will breach a contract. For example, if a supplier tells you ahead of time that it will not be able to complete a scheduled delivery, you’re facing an anticipatory breach of contract. In the event of an anticipatory breach, you can often take legal action even if the breach has not yet happened.
Legal Remedies for Contract Breaches
You Have Legal Recourse
When it comes to contract breach, Texas law allows you to pursue the breaching party for damages and take other types of legal action.
Damages
There are three main types of damages you can seek in the event of a breach of contract:
- Compensatory Damages: Funds to compensate you for financial losses directly related to the breach
- Consequential Damages: Compensation for losses indirectly related to the breach
- Liquidated Damages: Damages specified in the contract.
A business attorney can discuss your case with you and help you determine what types of damages you might be eligible for.
Specific Performance
If you pursue legal action against the other party, the court may sometimes order the other party to fulfill the contractual obligation.
Rescission
Rescission is a legal remedy that effectively cancels the existing contract between the parties. The goal is to put the parties back into the positions they were in before they entered the contract.
Reformation
Reformation is a remedy that preserves the contractual relationship. It involves rewriting the contract to correct any errors or misrepresentations that led to the breach in the first place.
If another party has breached a contract, you need to act quickly to protect your business. Call Weisblatt Law Firm at (713) 666-1981 for a free phone consultation.
Proving a Contract Breach in Texas
If you pursue legal action for a breach of contract, the court doesn’t simply take your word for it. Your legal team must be able to prove a breach occurred. This process usually involves (1) proving the elements of a breach of contract claim and (2) providing supporting evidence.
Elements of a Breach of Contract Claim
There are three main elements of a breach of contract claim in Texas:
- There is a valid contract in place between the parties.
- The other party breached the contract.
- You suffered losses as a result of that breach.
This illustrates why clear, detailed contracts are an absolute must — they can protect your business if a breach occurs.
Evidence
The evidence presented will vary depending on the type of breach, but it often includes at least some of the following:
- A copy of the signed contract
- Testimony from witnesses or other involved parties
- Your company’s financial records
- Any communications between you and the other party.
When you have an experienced business lawyer representing you, they can ensure you have all the evidence you need to make a convincing case.
How a Houston Business Attorney Can Help
If you want to protect your business from further damage after a breach of contract, hiring a breach of contract lawyer in Houston is essential. A contract dispute lawyer can offer you assistance throughout the process by doing the following:
- Negotiating directly with the breaching party
- Filing a lawsuit if needed
- Representing you in court if the matter cannot be settled out of court.
A business lawyer can also play a critical role in helping you avoid future breaches. They can review your existing contracts or draft new ones to ensure they are worded in a way that protects your company.
Has Your Business Been Affected by a Breach of Contract?
Weisblatt Law Firm Is Here for You
Some breaches of contract may simply create a minor inconvenience for your business. However, if the breach happens with a critical contract, you may find yourself facing a crisis. Either way, the other party in the agreement should be held accountable — and the business lawyers at Weisblatt Law Firm are ready to help. Founder Andrew Weisblatt served as in-house counsel and chief operating officer for a multi-national corporation before starting Weisblatt Law Firm, and his inside knowledge of the business world enables him to deliver quality service to his clients.
If you’re dealing with a breach of contract, you don’t have to figure out a solution on your own. Call Weisblatt Law Firm at (713) 666-1981 to schedule a free phone consultation.
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
