When you enter into an agreement with another person or entity, you assume the other party will hold up their end of the bargain. Unfortunately, this isn’t always the case.
Under Texas contract law, a non-breaching party has the right to bring legal action against the breaching party to recover damages if they choose to do so, but what should you do if you think you might have a claim?
Let’s take a closer look at what happens if there is a breach of contract, the steps to take to protect your rights, and how the team at Massingill Attorneys & Counselors at Law can help.
Step 1: Review the Contract
The first step is to review the contract thoroughly. Carefully examine the terms and conditions to understand the nature of the breach and how it violates the agreement. Identify the specific obligations of each party and any relevant deadlines or performance standards.
Additionally, look for dispute resolution mechanisms outlined in the contract, such as mediation, arbitration, or litigation clauses. Understanding these provisions will help you determine the best course of action moving forward.
If the breach of contract is clear and significant, you can proceed with notifying the other party and taking appropriate legal action to enforce your rights under the contract.
Step 2: Document the Breach
When the other party breaches a contract, it’s crucial to gather evidence to support your claim. Documenting the breach will strengthen your case if legal action becomes necessary. Make sure you:
- Gather all relevant documents, including the contract itself, to establish the terms of the agreement;
- Collect any correspondence related to the breach, such as emails, letters, or text messages;
- Keep copies of invoices, receipts, or other financial records that demonstrate the impact of the breach;
- Take notes on any verbal communications regarding the breach, including dates, times, and individuals involved; and
- Document any efforts made to resolve the breach, such as requests for performance or discussions about the issue.
If you have any questions about what evidence you need for a contract issue, be sure to seek the advice of an Austin breach of contract lawyer.
Step 3: Notify the Breaching Party
After documenting the breach, the next step is to notify the other party formally. The notification should be in writing and clearly outline the nature of the breach, the specific provisions of the contract violated, and the desired remedy or course of action. Be sure to include a deadline for the other party to respond or remedy the breach.
Sending this formal notice demonstrates your commitment to enforcing the contract and provides the other party with an opportunity to rectify the situation before you take further action. Seeking legal help can ensure you handle this important step properly, as it’s important to adhere to the contract’s terms and applicable Texas law when notifying the breaching party.
Step 4: Explore Negotiation and Resolution
While many assume the only way to solve a breach of contract dispute is through litigation, there are alternatives parties can explore to avoid the costs and time delays that characterize most court cases. After notifying the breaching party, explore these options to resolve the issue. Let’s look at some alternative dispute resolution types available to parties in Texas.
- Mediation. A voluntary and confidential process where a neutral third person (the mediator) helps the parties in a dispute reach a mutually acceptable resolution. A mediator does not impose a decision but assists the parties in finding common ground.
- Mini-trial. A structured dispute resolution process where each party presents its case to a panel consisting of senior decision-makers from each side. The panel then attempts to facilitate a settlement by providing an evaluation of the case.
- Moderated settlement conference. This is a settlement negotiation process facilitated by a neutral third party—the moderator—who helps parties discuss issues and explore settlement solutions. It is similar to mediation, but parties do not need attorneys for mediation and do need them for a moderated settlement conference.
- Summary jury trial. A mock trial allows the parties to present their case to a jury that delivers a nonbinding verdict. The purpose is to provide the parties with an indication of how a real jury might decide the case, thereby encouraging settlement.
- Arbitration. Arbitration can be binding or non-binding; if you choose non-binding arbitration, the decision is advisory. If unsatisfied, the parties can accept or reject the decision and pursue other means of resolution, such as litigation.
If these methods are insufficient, litigation may be the only other option.
Step 5: Consider Legal Action
If negotiations fail or the breach is significant and irreparable, consider pursuing legal action through litigation in court to enforce the terms of the contract and seek damages or other appropriate remedies.
Litigation is often considered a last resort, as it can be time-consuming, expensive, and adversarial. However, if other methods of resolution have been unsuccessful and the breach has caused substantial harm, legal action may be necessary to protect your rights and interests. Be sure to seek input from an experienced Texas contracts attorney before making any binding decisions.
Statute of Limitations
Every claim, including breach of contract claims, is subject to a time limit, known as its statute of limitations. In Texas, a party generally has four years from the date of the breach to initiate legal action, or they may be barred from pursuing damages. However, it is important to note that some causes of action must be brought within a shorter period, such as two years. If you have questions about deadlines, talk to an attorney.
Trust the Texas Contract Law Attorneys at Massingill
Breach of contract issues, no matter how simple or complex, can have a big negative impact on the non-breaching party. If you are facing this issue and don’t know how to start the process of seeking recovery, contact Massingill Attorneys & Counselors at Law today.
Whether you choose to pursue negotiation, alternative dispute resolution, or litigation, we have both the experience and proven track record of success to help protect your rights. Our dedicated team will fight hard to achieve the best outcome for you and be your guide every step of the way. Call to schedule a consultation, or fill out our online contact form to get in touch today.
Where You Can Find Our Austin, TX Office
Joshua Massingill
Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.
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