Opinion ID: 36872
Heading Depth: 4
Heading Rank: 1

Heading: Continuing Contract

Text: 61 As noted, the general rule in Texas is that contracts are breached, and the statute of limitations begins to run, when facts come into existence that authorize a claimant to seek a judicial remedy. 34 A cause of action arising out of contractual relations between the parties accrues as soon as the contract or agreement is breached. 35 A continuing contract is an agreement where the contemplated performance and payment are divided into several parts or, where the work is continuous and indivisible, the payment for work is made in installments as the work is completed. 36 On a continuing contract, however, the statute of limitations does not commence to run until the contract is terminated or fully performed. 37 Dell urges that the PSA was a continuing contract for which limitations could not begin to run until Dell made the determination that Rodriguez's conduct was in breach of his obligations and elected to terminate his continuing relationship with Dell, thereby triggering the clawback provision. 62 In Texas, parties typically enter into continuing contracts for projects such as construction, during which performance is made in measurable increments and compensated based on the value of work completed in each period, and for which there is a clear end-point. 38 To be sure, not every contract that Texas courts have declared to be a continuing contract fits this definition. 39 Still, Dell has referred us to no authority — and we have found none on our own — supporting the proposition that an employment compensation agreement, payable at fixed intervals, should be treated as a continuing contract. Indeed, Rodriguez points to at least one Texas Court of Appeals case holding that [t]he cause of action for the breach of an employment contract arises immediately upon the breach of the contract and limitations run from that time. 40 63 Dell insists that its claim against Rodriguez is for breach of the PSA, not breach of his employment contract. By its terms, however, the PSA specified the regular issuance of shares to Rodriguez, contingent on his continued employment with Dell. We decline the invitation to be the first court to expand the definition of continuing contract to include such an employment agreement.