Opinion ID: 2831408
Heading Depth: 1
Heading Rank: 1

Heading: Waiver of Governmental Immunity

Text: The Legislature has waived local governments’ immunity for breach of contract claims arising from “a written contract stating the essential terms of [an] agreement for providing goods or services to [a] local governmental entity.”1 A contract contains its “essential terms” when it outlines the material terms necessary to make a contract enforceable.2 And “services” is a term “broad enough to encompass a wide array of activities.”3 “[W]e construe contracts from a utilitarian standpoint bearing in mind the particular business activity sought to be served.”4 Each portion of a contract must be read in light of its other operative parts. “We consider the entire writing to harmonize and effectuate all provisions such that none are rendered meaningless.”5 While contract interpretation does involve close scrutiny of its individual components, “we must evaluate the overall agreement to determine what purposes the parties had in mind at the time they signed the [agreement].”6 When seeking to determine the intent of the parties, we also look to the text “as understood in light of the facts and circumstances surrounding 1 T EX . L O CAL G O V ’T C O DE § 271.151(2)(A). 2 See Kirby Lake Dev., Ltd. v. Clear Lake City Water Auth., 320 S.W .3d 829, 838 (Tex. 2010) (holding that an agreement satisfied the “essential terms” requirement because it “clearly outlined” “[t]he names of the parties, property at issue, and basic obligations”). 3 Id. at 839. 4 FPL Energy, LLC v. TXU Portfolio Mgmt. Co., 426 S.W .3d 59, 63 (Tex. 2014) (internal quotation marks omitted). 5 Id. 6 Kirby Lake, 320 S.W .3d at 841. 2 the contract’s execution.”7 We must interpret contracts as entire instruments, with an eye toward the practical intent of the parties and the surrounding circumstances, and we must give meaning and harmony to the contract’s various parts. I believe the Court has deviated from this well-worn course in its analysis of the District’s lease agreement.