Source: http://blog.rwrlegal.com/entrepreneur-litigation-prep-breach-of-contract/
Timestamp: 2019-04-24 09:47:34+00:00

Document:
There are countless areas in which an entrepreneur may have a need for business litigation to resolve a dispute against another business. One common type of business litigation case is a “breach of contract” which simply means that a legal promise, or contract, has been broken. A contract is a written or oral agreement between parties, which sets out the obligations and expectations of both sides to each other. Contracts can be simple or complex in nature. There are many different types of contracts, such as contracts with investors, employees, vendors and customers, which are often found in business and employment relationships. When a business does not fulfill its obligations under the contract, it is called a breach.
The elements of a breach of contract claim under Texas law are:1)Tyco Valves & Controls, L.P. v. Colorado, 2012 WL 159946 (Tex. App.—Dallas 2009, petition for review filed); Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied).
Damages to the non-breaching business resulting from that breach.
The general rule is that the non-breaching business should be restored to the position it would have been in had the contract been performed. In other words, the non-breaching business is generally entitled to all actual damages necessary to place it in the same economic position in which it would have been had the contract not been breached.2)Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741 (Tex. App.—El Paso 2000). The non-breaching business damaged by the breach, may seek remedies in law and equity from the breaching business.
Attorneys’ fees. Chapter 38 of the Texas Civil Practice and Remedies Code allows recovery of reasonable attorneys’ fees, subject to the judge’s discretion, in breach of contract cases in addition to the amount of a valid claim and costs.4)Tex. Civ. Prac. & Rem. Code Ann. § 38.001(8) (West 2008).
Contract Cancellation. The court may cancel the contract altogether and a new one may be formed to meet the parties’ requirements.
Understanding damages in a breach of contract claim is important prior to asserting a claim so that a business knows what is recoverable and what is not recoverable. It is also important so that the business knows how to prove actual damages.
Contract law is complicated and situations such as a breach of contract require experience to navigate and resolve. The resolution of such disagreements can be a high-stakes matter for all involved. A growing number of contracts require businesses to first attempt mediation or other alternative dispute resolution procedures before filing in a court at law. At times a confidential, economical, and agreeable resolution can be reached allowing the businesses to continue transacting business with each other on favorable terms.
Whether initiating or defending a breach of contract claim, it is necessary for the entrepreneur to determine the overall objective for resolving the dispute. In some cases, litigation may be necessary to protect financial interests and to ensure that financial assets are either recovered or not entirely lost. Effective alternative dispute resolution strategies to expeditiously and inexpensively resolve disputes may be needed.
If you have any questions about whether you or your business have a need for dispute resolution contact us today at 512-320-0601 for a complimentary consultation with an attorney to discuss.
1. ↑ Tyco Valves & Controls, L.P. v. Colorado, 2012 WL 159946 (Tex. App.—Dallas 2009, petition for review filed); Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied).
2. ↑ Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741 (Tex. App.—El Paso 2000).
3. ↑ Tex. Civ. Prac. & Rem. Code Ann. § 41.003 (West 2008).
4. ↑ Tex. Civ. Prac. & Rem. Code Ann. § 38.001(8) (West 2008).
Lance Hevizy is Litigation + Corporate Counsel at RWR Legal, where he practices in the areas of business litigation, real estate, corporate law, and dispute prevention and resolution.

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