A broken contract can disrupt your business operations and halt long-term plans. Texas law offers several paths to resolve a breach, but none of them are one-size-fits-all. This blog will cover what options are available to you.
Understanding the remedies available after a breach
When one party breaches a contract, the law aims to return the non-breaching party to the position they would have occupied had the other party honored the agreement. Here are some of the most common remedies a court may consider:
- Compensatory damages: These cover direct financial losses that the breach causes. These may include expectation damages.
- Consequential damages: These address the indirect losses that the parties could foresee when they formed the contract, such as lost revenue.
- Liquidated damages: These specify set amounts that the parties include in the contract itself. Texas courts will enforce these clauses as long as the amount fairly estimates the potential harm.
- Specific performance: This is a court order that requires the breaching party to carry out their duties.
- Attorney fees: Under Texas law, a prevailing party may recover reasonable legal fees for a breach of a written or oral contract, provided the claim is properly “presented” to the opposing party first.
State courts also require you to take reasonable steps to mitigate your damages. If you fail to make a fair effort to minimize your losses after a breach occurs, the amount you are able to recover may be significantly reduced.
Preserving evidence that supports your claim
Building a strong breach of contract case starts well before a hearing. Here are some steps that you might want to consider:
- Save all written messages, including emails, texts and letters tied to the contract and the breach
- Track your financial losses with invoices, bank records and profit-and-loss reports that show the impact on your business
- Issue a litigation hold as soon as a dispute is foreseeable to prevent the deletion of digital files and metadata
- Identify witnesses who can testify to how the breach happened
Some forms of evidence, particularly digital records, can be lost or overwritten through routine system updates. Beginning the preservation process early can help you build a more reliable foundation if you need to present your case later on.
Seeking emergency relief when time is critical
Some contract breaches create situations where waiting for a full trial could cause serious and lasting harm. In those cases, seeking fast court action may be worth exploring.
A temporary restraining order (TRO) is a tool used to freeze the situation until a judge can hold a full hearing. To obtain one in Texas, you must file a sworn statement proving that you will suffer “irreparable harm” and post a security bond with the court.
It is worth knowing that a TRO is strictly limited to 14 days. This short window gives the court time to schedule a hearing for a temporary injunction, which can stay in place until your trial.
Working with experienced legal counsel on your dispute
Courtroom-tested legal counsel can evaluate your claim, find the remedies that fit your goals and prepare for opposing arguments. Attorney Schwartz of JB Schwartz PLLC, for example, draws on a law librarian background to conduct deep legal research, which can provide an edge when reviewing complex contract language.
Whether your case calls for a negotiated resolution, a damages claim or emergency relief, JB Schwartz PLLC fights for your business. Contact us today to have your case reviewed.