Breach Of Contract Lawyer Austin TX
A contract is the basis of any business relationship or transaction. The usual contract consists of mutual promises such as the promise of payment or the delivery of a service, called consideration or something of value, in return for the performance of an act. For example, if someone promises to deliver a thousand bushels of corn, you agree to pay them X amount of dollars. Most contracts are simple but many involve complex terms which if not followed may form the grounds for a breach of contract claim.
At Byrd Davis Alden & Henrichson, LLP, we have handled various types of contract breach issues including:
- Licensing agreements
- Distribution agreements
- Real estate contracts
- Partnership agreements
- Purchasing agreements
- Construction contracts
- Non-compete agreements
If you have any questions about the nonperformance of a contract or if you are accused of breaching an agreement, call our law office to discuss your issue.
The Elements of a Valid Contract
Before you can prevail on a breach of contract claim, you must prove the existence of the following:
- A valid contract existed between the parties, or plaintiff and defendant.
- The plaintiff tendered performance or had a valid legal excuse from doing so.
- The defendant breached the terms of the contract or failed to act in accordance with the contractual terms.
- The plaintiff suffered damages as a result of the breach.
What is a Valid Contract?
Essentially, a valid contract is where you and another party mutually agree on all the material or major terms of the contract. There must also be an offer to do something and an acceptance. For instance, a business may offer to make you 1000 gloves for X dollars. If you equivocate or state that you will consider the offer, you have not accepted it and the glove maker has no basis for going ahead and manufacturing the gloves. You may also want the gloves to be made but for a different price. If so, you have not accepted the offer since a material term was not agreed upon and have made a counteroffer.
Many situations arise when there is confusion over whether an offer has been accepted or if a counteroffer was made. An offer remains open for a reasonable time, but many contracts may have an expiration date where an offer remains open for a certain time before expiring. In these cases, the open offer is called an option where you make a payment to the offeror to keep the offer open while you contemplate whether to accept it or make a counteroffer.
Also, a party may revoke an offer and the issue is whether the other party accepted it or not.
The parties to a contract must be competent. A minor, or someone under the age of 18, a mentally incompetent person or someone who is drugged or intoxicated do not have the capacity to enter into an enforceable contract and can seek to void the contract.
Written or Oral Contracts
An oral contract can be valid and enforceable but some contracts must be in writing. The following require that the contract be in writing:
- Sale or lease of, or a mortgage, on real property.
- A contract that by its terms cannot be performed within one year after the contract was formed.
- A contract to guarantee the obligation or duty of another person.
- A promise made in consideration of marriage such as a prenuptial agreement.
- A contract for the sale of goods valued at $500 or more.
What is Acceptance?
Silence or inaction does not mean that the contract has been accepted. If you do not reply but send a check for the proffered amount, you have likely accepted the contract. A contract should specify the method of acceptance to avoid confusion. If you should only agree to a portion of the agreement, however, this generally does not constitute acceptance. Negotiations typically consist of offers and counteroffers.
There are instances where the offering party has made a mistake on the cost or price of a product. Even if you accept the offer and tender performance by sending the check, the offeror can opt to not accept your offer and offer the intended price to you.
As noted, the offering party can condition acceptance such as giving the other party two days to accept. If the party accepts on the third day, there is no acceptance unless the offering party agrees. Any conditions placed on an acceptance is a counteroffer.
When is a Party Excused from Performing?
If you have reason to believe the other party cannot or will not perform according to the contract, you can demand adequate assurance of performance and suspend your own performance until you have received it. If none is given, you can repudiate the contract. Any contract for the sale of goods is governed by the UCC, or Uniform Commercial Code, which outlines your right to nonperformance in this and under other circumstances.
The object or subject of the contract is destroyed. For instance, you agreed to buy a piece of antique furniture. If a storm or fire destroys it without the fault of either party, the contract is avoided.
If something occurs that makes delivery impractical, such as the destruction or breakdown of the mode of transportation, then the contract may be voidable unless a practical alternative is available. The impediment to performance must have been something beyond the control of the performing party.
If the contract was illegal, such as an agreement to share the proceeds of a criminal enterprise, it is not enforceable.
What Constitutes Breach of Contract?
A breach of contract is where one party breaks a legal promise to perform as the parties intended under the contract. As the aggrieved party, you must have performed your duty or obligation while the other party did not. To recover, the breach must have been of a fundamental aspect of the agreement, or a material breach, since it essentially takes away the value of the agreement.
Damages for Breach of Contract
As the aggrieved or non-breaching party, you can claim certain damages:
- Actual or compensatory damages
- Consequential and incidental damages
- Specific performance in some cases
- Reliance damages
- Punitive damages in some cases
The damages to which you are entitled are to put you in the position you would have been in if the contract had not been breached, or compensatory damages. You can recover what net profits you would have made. In a goods case, if a buyer refuses or does not pay the agreed price for the goods, the seller can sue for that price even if it is higher than the market price. If for services, damages are measured by the reasonable cost of replacing those services.
Punitive damages are available in some breach of contract cases but are generally not awarded in routine cases. If fraud or misrepresentation is alleged and proved, you may be able to recover treble damages in some cases under the Texas Deceptive Practices Act.
If you did suffer damages from a breach of contract, though, you are obligated to take reasonable measures to mitigate your damages, such as finding an alternative seller to buy your fungible goods or before your product spoils.
Breach of Contract Attorneys
A breach of contract can lead to substantial damages or seriously affect the operation of your business. If you are accused of a material breach, you could face substantial penalties if you fail to mount a defense. If you are faced with a lawsuit or are contemplating legal action regarding a business controversy, call our law firm at 512-271-5304 to arrange for an appointment. Our Austin business litigation & defense lawyers want to help you.