You had a deal. You held up your end. The other party did not. Now you're left with financial losses, operational disruptions, and a broken business relationship. Can you sue for breach of contract in Texas – and more importantly, can you win?
The short answer is yes, Texas law allows businesses to pursue legal remedies when contracts are breached. But winning a breach of contract lawsuit requires more than just showing someone didn't keep their word.
Whether you're considering legal action or already facing a contract dispute, understanding the requirements, process, and potential outcomes is essential to making informed decisions about protecting your business.
Here's what every Texas business owner needs to know about suing for breach of contract:
Can You Sue for Breach of Contract in Texas?
Yes, you can sue for breach of contract in Texas. When a business partner, vendor, employee, or other party fails to honor their contractual commitments and your business suffers financial harm as a result, Texas law provides legal recourse through breach of contract litigation.
To prevail in a Texas breach of contract lawsuit, you must establish four key elements: the existence of a valid, enforceable contract; your performance or valid excuse for non-performance; the other party's failure to perform their obligations; and quantifiable damages you suffered because of the breach.
The contract can be written or oral (though certain agreements must be in writing), and you must file your lawsuit within four years of discovering the breach.
The 4 Elements Required to Prove Breach of Contract in Texas
In order to launch a successful lawsuit, the plaintiff claiming breach of contract has to prove all the following elements:
Element 1: Existence of a Valid Contract
For a contract to be deemed valid, it must have an offer, acceptance of the offer, and mutual consideration (both parties must give up something of value, such as money for a service).
Even with these elements in place, a contract may still be invalid if the parties who entered into the contract were not competent: Minors, adults with incapacities, or adults under the influence of alcohol or drugs may not enter a legal arrangement.
Similarly, if the subject matter of the contract is illegal, it is not a valid, enforceable contract.
Element 2: Plaintiff Performance
The plaintiff (the party making the breach of contract claim) must prove they fulfilled their contractual obligations. This element prevents parties who have breached the contract themselves from suing the other party for breach.
What constitutes adequate performance:
- Complete performance: You fulfilled every term and condition specified in the contract
- Substantial performance: You performed the contract's essential obligations, even if minor details remain incomplete (courts may allow recovery with adjustments for deficiencies)
- Partial performance: You performed some obligations but not all – this may still support a claim depending on the circumstances and what the other party received
Courts examine whether you performed in good faith and substantially complied with material contract terms. Perfect performance isn't always required – but you must show you held up your end of the bargain in all meaningful ways.
Element 3: Defendant Breach
You must prove the defendant failed to fulfill specific contractual obligations and that this failure was material – meaning it deprived you of the benefits you bargained for when entering the agreement.
A breach occurs when one party:
- Fails to perform entirely: The defendant did nothing required under the contract (total breach)
- Performs defectively: The defendant attempted performance but failed to meet contract specifications or quality standards
- Performs partially: The defendant completed some, but not all, required obligations
- Performs late: The defendant missed contractual deadlines when timing was material to the agreement
- Repudiates the contract: The defendant clearly indicated – through words or actions – they will not perform (anticipatory breach)
Element 4: Damages
You must prove you suffered actual, quantifiable harm as a direct result of the defendant's breach. Texas courts require damages to be proven with "reasonable certainty" – speculation about potential losses isn't sufficient.
Understanding Material vs. Non-Material Breach
Not all contract breaches are treated equally under Texas law. The distinction between material and non-material breaches determines your available remedies and whether the other party can continue demanding your performance.
A material breach occurs when a party fails to deliver the fundamental benefits you bargained for when signing the contract – making the agreement essentially worthless. For example, if you contracted for a custom software system and the vendor delivered a product that doesn't perform its core functions, that's a material breach. Material breaches typically excuse the non-breaching party from further performance and provide grounds for terminating the contract.
A non-material breach (also called a partial or minor breach) happens when a party substantially performs but fails on secondary details. For example, if that same software vendor delivered fully functional software but missed the deadline by a few days – and time wasn't specified as "of the essence" – that's likely a non-material breach. You may be entitled to damages for the delay, but you still must pay for the software and can't terminate the contract.
Texas courts examine multiple factors to determine materiality: the extent to which you've been deprived of expected benefits, whether the breach defeats the contract's purpose, the extent of partial performance, and whether damages adequately compensate you.
Because defendants often argue their breach was merely "minor" or that no valid contract existed, having an experienced breach of contract attorney who understands Texas contract law is essential to effectively presenting your case and protecting your interests.
What Damages Can You Recover?
Texas law allows parties who prevail in breach of contract claims to be “made whole,” which usually means monetary payment in the form of damages, including:
- General (or Direct) Damages: Losses as a direct result of the breach.
- Special (also known as Consequential or Incidental) Damages: Profits lost on other contracts or relationships as a direct result of the breached contract.
- Reliance Damages: Compensation for expenses you incurred in reasonable reliance on the contract being performed, such as preparations made in anticipation of performance, materials purchased or labor costs expended, and opportunity costs from turning down alternative contracts.
- Restitution Damages: Recovery of any benefits you conferred on the breaching party, such as payments made before the breach occurred or the value of services or goods you delivered before the breach.
- Liquidated Damages: A reasonable estimate of just compensation when the harm caused by the breach is impossible or difficult to estimate. A provision for these types of damages must be included in the original contract to be considered. These are common in construction contracts, where delays can cause exponential harm.
- Attorney’s fees may be recovered if the breach is proven and if monetary damages are recovered.
Exemplary damages, punitive damages, and damages for mental anguish are generally not recoverable in breach of contract matters.
Equitable Remedies
What if money damages alone can't make things right? If monetary damages will not be sufficient to make your business whole after a breached contract, you may be entitled to an what is known as an “equitable remedy.”
In Texas, there are four types of equitable remedies for breach of contract:
- An injunction, which is a court order that requires a party to refrain from an action. This is intended to restore the status quo while the claim is resolved.
- Specific performance, which requires the breaching party to fulfill its contractual obligations as agreed upon in the contract.
- Rescission, which involves setting aside or “undoing” a contract to avoid unjust enrichment and the return of consideration that has been exchanged, thus restoring the parties to the same position they were in before forming a contract (and allowing them to enter into a new contract if desired).
- Reformation, which involves the court correcting a mistake in the prevailing contract so it reflects each party’s intentions correctly.
As with liquidated damages, some remedy options are included as provisions in the original contract. It is imperative to review the underlying contract prior to considering your legal options.
Texas Breach of Contract Statute of Limitations
The statute of limitations for breach of contract claims in Texas is four years, meaning you must typically file a lawsuit within four years of the breach. Failure to do so means you will not be able to pursue your claim in Texas courts.
It is important to contact a lawyer with knowledge of breach of contract cases as soon as possible to determine if your case meets the time limit and initiate your lawsuit in time.
Step-by-Step Process: How to File a Breach of Contract Lawsuit in Texas
While every breach of contract case is unique, most follow a similar trajectory from initial discovery of the breach through final resolution. The timeline for breach of contract litigation in Texas typically ranges from 12 to 24 months, though complex cases involving multiple parties or substantial damages may take longer.
Here's what you need to know about each critical stage of the litigation process:
Step 1: Review Contract Terms
Before taking legal action, your attorney will conduct a thorough analysis of your contract to understand your rights, obligations, and available remedies. This critical review includes:
- Identifying Specific Breached Obligations: Your attorney will pinpoint exactly which contract provisions were violated, what performance standards weren't met, and whether you fulfilled all your own obligations.
- Examining Dispute Resolution Provisions: Many contracts contain mandatory arbitration clauses, mediation requirements, forum selection clauses, notice requirements, or cure periods. Your attorney will ensure you comply with these provisions, as failing to follow contractual dispute resolution procedures can result in your lawsuit being dismissed.
- Analyzing Available Remedies and Potential Defenses: Your attorney will review liquidated damages clauses, limitation of liability provisions, attorney's fees provisions, and specific performance clauses to assess the potential value of your claim. They'll also anticipate defenses the other party might raise – such as substantial performance, impossibility, or statute of limitations arguments – and gather evidence to counter these defenses early.
Step 2: Document the Breach
As the plaintiff, you bear the burden of proving damages. Courts won't award damages based on guesswork or possibilities – you need documented financial harm backed by credible evidence.
Your attorney will help you gather and organize all evidence needed to prove your case, including:
- Original, signed contracts and all amendments or modifications
- Evidence of your contract performance and their breach, such as delivery confirmations, email correspondence, time sheets, project schedules, photographic or video evidence, and inspection records
- Documentation of damages, such as financial records showing lost revenue or profits directly attributable to the breach, invoices for additional costs incurred to complete work, expert valuations or financial analysis of your losses, and evidence of lost business opportunities or reputational harm
Your attorney will also instruct you to preserve digital evidence (emails, text messages, cloud documents) and ensure you meet your legal duty to preserve relevant information once litigation is anticipated.
Step 3: Send Demand Letter
While Texas law doesn't typically require a formal demand letter before filing suit, your attorney will almost always recommend sending one. A well-crafted demand letter can resolve disputes without litigation and demonstrates good faith if the case proceeds to court.
Step 4: Attempt Negotiation
Your attorney will work to resolve the dispute through negotiation or mediation before filing a lawsuit. Most breach of contract disputes settle without trial, and good-faith negotiation efforts can save substantial time, money, and business relationships.
Step 5: File in Appropriate Court
If negotiation and mediation don't resolve the dispute, your attorney will file a lawsuit to protect your rights and pursue your legal remedies.
Your attorney will also determine the proper geographic venue – typically where the plaintiff or defendant resides, where the events giving rise to the claim occurred, or where the contract specifies.
Step 6: Discovery
Once the lawsuit is filed and the defendant responds, the case enters the discovery phase – often the longest and most labor-intensive part of litigation, typically lasting 6-12 months.
Your attorney will manage all aspects of discovery to gather evidence supporting your case.
Step 7: Trial or Settlement
As discovery progresses, both sides gain a clearer picture of the evidence and likely trial outcome. Your attorney will use this information to advise you on settlement opportunities and, if necessary, prepare your case for trial.
Texas breach of contract trials typically last two to five days for straightforward cases. Your attorney will guide you through jury selection, present your case through witness testimony and documentary evidence, cross-examine the defendant's witnesses, deliver closing arguments, and obtain judgment based on the verdict.
Common Defenses to Breach of Contract Claims:
Be prepared for defendants to argue:
- They substantially performed despite minor deficiencies
- You waived strict compliance or accepted defective performance
- Performance became impossible or impracticable due to unforeseen circumstances
- You breached first, excusing their performance
- The contract terms were ambiguous, and they performed according to their reasonable interpretation
- Technical issues or force majeure events prevented performance
Your attorney will anticipate these defenses and gather evidence countering them before the defendant raises them.
When Should You Contact an Attorney for a Contract Dispute?
Contact a breach of contract attorney as soon as you suspect a breach or contract dispute is developing – ideally before the relationship deteriorates completely. Early legal intervention can help you avoid costly mistakes, preserve critical evidence, and often resolve disputes more efficiently than waiting until positions harden and litigation becomes inevitable.
Seek the legal counsel of an experienced Texas contract law attorney:
- Before signing a contract: An attorney can review terms, identify problematic provisions, and negotiate favorable dispute resolution clauses
- When performance issues first arise: Early legal advice helps you document problems properly and pursue appropriate remedies
- After receiving or before sending a demand letter: Legal guidance ensures you protect your rights and avoid inadvertent admissions
- Before the statute of limitations expires: You have four years in Texas – don't wait until the deadline approaches
- When the other party threatens legal action: Immediate attorney involvement protects you from making statements that could harm your defense
- If the contract involves significant value: High-stakes disputes require professional guidance from the outset
The longer you wait, the more difficult it becomes to gather evidence, preserve witness memories, and negotiate favorable resolutions. What seems like a minor disagreement today can escalate into expensive litigation tomorrow. An experienced contract attorney can assess your situation, explain your options, and help you make informed strategic decisions that protect your business interests.
If you're facing a contract breach or defending against breach allegations, time is critical. Contact our Houston office today at (713) 528-8793 or reach out online to discuss your case with an experienced Texas breach of contract attorney.