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Texas Breach of Contract

©2014 Mark Courtois and Diane Davis

Texas law recognizes a cause of action for breach of contract. The elements of a breach of contract claim are: 1) existence of a valid contract; 2) performance or tendered performance by the plaintiff; 3) material breach by the defendant; and 4) damages sustained by the plaintiff as a result of that breach. Paragon Gen. Contractors, Inc. v. Larco Constr., Inc., 227 S.W.3d 876, 882 (Tex. App.--Dallas 2007, no pet.)

Elements of a Contract

A contract exists if the following elements are present: (1) an offer (2) an acceptance (3) a meeting of the minds (4) a communication that each party has consented to the terms of the agreement; and (5) execution and delivery of the contract with an intent that it become mutual and binding on both parties. Hallmark v. Hand, 885 S.W.2d 471, 476 (Tex. App.--El Paso 1994, writ denied).

Material Breach/Excuse from Performance

When one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance. Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004). The covenant breached must be part of mutually dependent promises in order to excuse further performance by the non-breaching party. Hanks v. GAB Bus. Servs., Inc., 644 S.W.2d 707, 708 (Tex. 1982). Generally, the issue of whether a breach rises to the level of a material breach that will render the contract unenforceable presents a question of fact. Cont'l Dredging, Inc. v. De-Kaizered, Inc., 120 S.W.3d 380, 394-95 (Tex. App.--Texarkana 2003, pet. denied). Whether a breach is a material breach necessarily turns on the facts of each case. Advance Components, Inc. v. Goodstein, 608 S.W.2d 737, 739 (Tex. Civ. App.--Dallas 1980, writ ref'd n.r.e.) (citing Bowen v. Briscoe, 453 S.W.2d 287, 289 (Tex.1970)). Citing the Restatement (Second) of Contracts, section 241 (1981), the Texas Supreme Court noted five factors significant in determining whether a failure to perform is material, i.e., whether the breach is material:

1) the extent to which the injured party will be deprived of the benefit which he reasonably expected;

2) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;

3) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;

4) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of the circumstances including any reasonable assurances; and

5) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.

Mustang Pipeline, 134 S.W.3d at 199. Another factor relevant to assessing the materiality of the breach is the extent to which it reasonably appears to the injured party that delay may prevent or hinder him in making reasonable substitute arrangements. Id. (citing Restatement (Second) of Contracts § 242 (1981)).

Statute of Limitations

Statute of limitations refers to the time within which a claim must be brought or the claim will be barred as a matter of law. See Cadle Co. v. Wilson, 136 S.W.3d 345, 350 (Tex. App.- Austin 2004, no pet.). Normally the limitations period begins when cause of action accrues. A cause of action accrues, and the statute of limitations begins to run, when facts come into existence that authorize a claimant to seek a judicial remedy. Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex. 2011) (op. on reh'g). There is a four year statute of limitations for breach of contract claims. Pollard v. Hanschen, 315 S.W.3d 636, 641 (Tex. App.--Dallas 2010, no pet.).