Opinion ID: 2818114
Heading Depth: 2
Heading Rank: 1

Heading: The RSAs terminated the contract.

Text: The RSAs argue that they never terminated the contract and thus that they cannot owe early termination fees. In their view, because the contract never promised Paramount exclusivity or a minimum number of customer records to process, the RSAs could stop using Paramount’s services and start using another provider’s, all without terminating the contract. This argument fails precisely because it negates the contract’s early-termination and liquidated-damages provisions. The Supreme Court of Texas reads all parts of a contract together, giving “meaning to every sentence, clause, and word to avoid rendering any portion inoperative.” Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 740-41 (Tex. 1998). Here, Section 12.2 explained that “[a]t any time after twelve (12) months from the date of this Agreement, [the RSAs] may terminate this Agreement upon ninety (90) days prior written notice to [Paramount].” If the RSAs had no obligation to use Paramount’s services, this clause had no purpose: the RSAs never would have needed to terminate an agreement that did not obligate them to do anything. Similarly, Section 12.3 explained that if the RSAs did terminate the agreement under Section 12.2, they would owe Paramount liquidated damages. The RSAs’ interpretation effectively renders this clause inoperative as well because the RSAs never would have owed damages for termination after notice—not when they simply could have stopped using Paramount instead. Thus, the contract as a whole shows that the RSAs did agree to use Paramount’s services to some extent. So when they told Paramount they were switching billing companies, asked it to shut down its system, thanked its employees, and eventually stopped using Paramount -6- entirely, the RSAs terminated the agreement. See Hughes v. Cole, 585 S.W.2d 865, 866-67, 869 (Tex. Civ. App. 1979) (explaining that the contract there could “be terminated by either party by giving notice of or doing something sufficient to indicate to the other party an intention to do so”).