Breach of Contract
A breach of contract occurs when a party fails to perform a part of or the whole of a legally binding agreement without a valid legal excuse.
A breach can occur in all sorts of ways. A party might refuse to uphold the contract as a whole, such as if one business refuses to pay another. A party might also fail to perform one of several provisions within the agreement.
Some of the most common breach of contract claims we see include:
- Tortious interference with a contract
- Violation of a non-compete agreement
- Violation of a non-disclosure agreement
- Failure to uphold oil & gas contracts
- Delays in payment or delivery
- Failure to provide services
- Delivery of products not matching the description
When you allege that someone breached a contract, you will need to identify how the agreement was violated, and whether it was a minor or material breach. Determining whether the breach was minor or material dictates your duty under the law and the damages you might be entitled to pursue.
A breach of contract is material if it results in an outcome substantially different than what the agreement specified. As the non-breaching party, if you did not receive what you meant to receive under the contract, it is a material breach. You are no longer obligated to perform any other duties under the contract, and you have the right to seek a remedy in court.
If the outcome was slightly different than the intended outcome, and not substantially different, then the breach may be minor. A minor breach often occurs when a party fails to perform one provision of many within a contract, but the non-breaching party still receives the product, service, or payment they were meant to. For a minor breach of contract, you must still perform your duties under the agreement, but you can pursue a remedy.
Breach of Contract Damages
When you have evidence that another party violated a legally binding agreement, you can go to court and ask for a remedy. This remedy typically includes damages, which entails receiving compensation for your various injuries.
You may receive compensatory damages, which include general and special damages. General damages encompass the financial losses and expenses you incurred as a direct result of the breach. You also may be entitled to special damages, which are other costs you incurred indirectly due to the breach and a special set of circumstances.
The amount you may receive depends on a number of factors. A judge will attempt to place you in the same position you would have been in had the contract not been breached. You also may receive compensation for your costs in rectifying the breach. However, you must take reasonable steps to mitigate the injury the breach caused you.
The legal remedy may also include asking the court to require the other party to perform or refrain from performing a specific act. You may ask the court to require specific performance of the contract. This would require the breaching party to complete the intended outcome of the agreement. For example, hand over a specific and unique piece of property.
However, there are limits to what a court can order another party to do. A court will not order a party to provide a personal service, such as paint your home or install equipment at your business.
Breach of Contract Litigation
Filing a breach of contract lawsuit is not a simple process, especially when your damages are more than the $10,000 small claims court limits in Texas and New Mexico. When a breach of contract has cost you tens or hundreds of thousands of dollars, speaking with breach of contract attorney about the best next steps may be a worthwhile investment.
The breach of contract litigation process includes:
- Analyzing the validity of an oral or written contract;
- Analyzing the terms and duties prescribed in the contract;
- Identifying the breach;
- Collecting evidence of the breach of contract;
- Identifying witnesses who have firsthand experience with the contract in question;
- Calculating the economic damages associated with the breach;
- Filing a lawsuit against the breaching party;
- Entering into settlement negotiations with the breaching party; and
- Resolving the case with a pre-trial settlement or going to trial.
Not every breach of contract dispute goes to trial. You and the other party also have the option to pursue a resolution through mediation or arbitration. In some cases, the contract may require mediation or arbitration.
Breach of Contract Statute of Limitations
Like virtually all legal actions, states put a time limit on your ability to file a breach of contract claim and pursue damages:
- In Texas, you have four years from the date of the breach to file a lawsuit. This is the date you knew or reasonably should have known the other party violated the terms of the agreement.
- In New Mexico, the statute of limitations is six years for written contracts or four years for oral contracts, though some specific contract disputes have different time limits.
Texas and New Mexico Business Disputes
Though breach of contract claims are very common, they are not the only business disputes we address.
- Breach of Fiduciary Duty: Professionals in certain positions of power and trust have a fiduciary duty toward their employer or client. A fiduciary duty means one party must act in the best interests of the other. If you have evidence that another person breached their duty to act in your business’s best interests, talk about filing a breach of fiduciary duty lawsuit. When a significant breach caused your business financial harm, then the law may entitle your business to damages for a breach of fiduciary duty. In Texas, the statute of limitations for breach of fiduciary duty is four years.
- Unfair Business Competitions and Practice: Unfair business practices encompass a wide range of unlawful behaviors, including false advertising, trademark or copyright infringement, misappropriation of trade secrets, breach of restrictive covenants, libel, slander, and much more. If you believe another party is violating the law or a contract to gain an unfair business advantage, you may be entitled to compensation.
- Tortious Interference with a Contract: It is unlawful for a party to intentionally interfere or attempt to interfere with other parties’ existing contracts and cause one or more of the parties’ financial harm. The line between normal business competition and tortious interference can be a thin one. If you believe a third party is willfully harming your contractual relationships with other businesses or individuals, call us right away.
- DTPA (Consumer Fraud) Claims: You may have a claim under Texas’ or New Mexico’s Deceptive Trade Practices Act (DTPA) if you are a consumer who has been injured due to a false, misleading, or deceptive business practice or breach of warranty. Texas has its own law addressing unfair business practices while New Mexico adopted the Uniform Deceptive Trade Practices Act. If you were harmed by an unlawful business practice, you might be able to obtain compensation for your financial injuries, and in some cases, mental anguish.
- First-Party Insurance Disputes: When you, as an individual or business, pay for insurance, you expect your insurer to uphold the contract. However, all too often. Insurers use unfair and deceptive tactics to avoid paying out on an insurance policy or defending you against a claim. Both Texas and New Mexico laws allow policyholders to sue their insurers for bad faith conduct.
- Anti-Competition Disputes: Business practices that are intended to reduce competition unfairly are unlawful. These practices include price fixing, bid rigging, group boycotts, exclusionary contracts and trade association rules, and other deceptive acts. Texas regulates these acts through the Texas Fair Enterprise and Antitrust Act, and New Mexico regulates these acts through its Antitrust Act.
- Fraud & Misrepresentation: Businesses and individuals can be held liable for intentionally using deception to obtain an unlawful financial or personal advantage. In some cases, they also can be held liable for negligently or recklessly misrepresenting something to you and causing you harm. The misrepresentation the other party made must have been material, intentionally, recklessly, or negligently presented, and relied upon.
- Mineral Right Disputes: Because the Permian Basin is spread across large areas of Texas and New Mexico, oil and gas contracts are prevalent. Landowners also own the minerals beneath the surface of their property. However, the right to these minerals can be divided and given to another party. These mineral rights are complicated, including whether the minerals are community or separate property, when and how the other party can access the land, and the compensation owed to the owner(s). If you find yourself in a dispute regarding a mineral rights contract, you may be entitled to compensation.
Business Dispute Compensation
When you are injured in a business dispute, the potential damages you may be entitled to under the law will depend on the specific type of unlawful conduct and the harm done. The value of your damages depends on your monetary losses and expenses.
Common types of damages recoverable in business disputes include:
- Statutory Damages
- Past and Future Lost Earnings
- Loss of Business Reputation or Community Standing
- Reasonable Attorney’s Fees
- Past and Future Mental Anguish
- Out of Pocket Expenses
- Fees for Experts
Proving these damages can be difficult. It is not enough to go to court and say an individual or business’s conduct harmed you. You must prove the type of harm you suffered and its value.
Proving your damages can be straightforward when you need to establish lost earnings or statutory damages. It can be complicated when you allege an intangible injury, like harm to your reputation or mental anguish.
Business Dispute Lawsuits
Our business dispute lawyers can guide you through:
- Reviewing your relationship with the other party;
- Determining whether a contract, statute, or common law principle governs the relationship;
- Investigating and gathering evidence of the unlawful conduct;
- Gathering evidence of your personal or professional injuries;
- Retaining experts to support your claim for compensation or another remedy;
- Filing a civil lawsuit against the other party;
- Pursuing a resolution through mediation or arbitration, whether voluntarily or as required by a contract;
- Taking your claim to trial if a settlement is unavailable.
Business Disputes’ Statutes of Limitations
The Texas or New Mexico statute of limitations that applies to your business dispute depends on the type of harm alleged and the law governing the situation. Not all business disputes have the same time limitations.
In some cases, the statute of limitations is four years. In others, the time restraint will be fewer or a greater. However, it is rarely helpful to wait years to address a business dispute. Once you believe you have been harmed by a business’s conduct, let an experienced business lawyer review the circumstances, advise you of your options, and calculate the amount of time you have to file a lawsuit.
How We Approach Contract and Business Disputes and Win
When a businessperson or consumer comes to us with a contract or business dispute, our first priority is learning all of the facts. We gather any and all communications between the parties, written contracts, and eyewitness statements. We use this to determine the relationship between the parties.
When we fully understand the relationship, we will determine any oral or written contract, statute, or common law principle that applies. It is essential to identify whether this is a dispute governed by the common law or whether this is a violation of a particular state or federal statute.
We also work closely with you to identify all of your damages, including direct and indirect economic consequences, emotional injuries, and other intangible injuries. When appropriate, we will retain experts to help us establish your claim and calculate the value of your damages.
This level of preparation is how we win cases. We never treat a breach of contract, fraud, or mineral rights case the same as the next, and we will find a solution that works for you, whether that is through mediation, arbitration, or aggressive litigation.
We limit our caseload to ensure we can give each case our full attention. We give ourselves plenty of time to carefully review any relevant contract or law, and develop a custom strategy to recover the maximum compensation available.