Breach of contract seems simple enough: When one party doesn't perform an agreed-upon action, then there is a breach of contract.
But as in many things, it isn't that simple.
What is a valid contract?
A breach of contract charge has to be preceded by a valid contract. Depending on the subject matter and the amounts involved oral contracts may or may not be valid. For a contract to be valid in Texas, the parties must show:
- An offer one party has made to another for consideration for the performance of a legal obligation
- An agreement to comply with the terms of the offer
- A meeting of the minds that spells out the agreements that both parties agree to adhere to
- Communication that clearly shows each party agreed to the terms that is binding and mutual
Once a valid contract is in place, then a breach of contract can be alleged with these four elements: there was a valid contract, the plaintiff tendered performance, the defendant didn't perform their part of the agreement, and the plaintiff was damaged by the defendant's actions.
The statute of limitations is four years after the date of the breach.
Special rules apply for contracts that deal with the lease or conveyance of real estate, employment for a term greater than one year, and for the sale of commercial goods for a price greater than $500.00, among other matters.
Types of breach of contract
There are three types of breach of contract:
- A material breach occurs when the fault is significant enough that you don't have to fulfill your part of the contract.
- A partial breach isn't as significant and doesn't prevent you from fulfilling your part of the contract.
- An anticipatory breach occurs when you suspect the defendant won't complete his part of the contract.
If a court finds that a breach of contract exists, there are several potential remedies including general damages for the loss you incurred, punitive damages added on as a form of punishment, or an injunction that requires the defendant to stop the action that is causing the breach of contract.
The court can also allow the plaintiff to recover a reasonable amount of attorney's fees.