Contract Dispute Attorney in Texas: What to Know Before You Sue
Nobody signs a contract to end up in dispute. However, things like clients refusing to pay, business partners going back on their word, and other types of broken agreements happen. When that happens, you need someone by your side to advocate for you and get you a favourable resolution.
So, if you’re looking for a contract dispute attorney in Texas to resolve a breach of contract or you want to take precautionary steps to tighten your contract so it doesn’t happen, here are some of the things to watch for.
And if you already know what to look for and need a dispute attorney to hear your case, you can skip ahead — Book a Consultation with MCIS Law.
What Constitutes a Breach of Contract in Texas?
A very popular myth is that disagreements are a breach of contract. Well, not necessarily.
A breach of contract happens when one party in a legally binding agreement fails to uphold their end of the bargain. So, unless your disagreement is because the other party didn’t fulfill their promise, it’s a conflict, not a breach of contract.
Here are some things to note before filing for a breach of contract:
- You need a valid contract
- You must have fulfilled your own obligations under the contract (or have a valid reason for not doing it)
- The other party failed to uphold their end of the bargain
- The failure of the other party to fulfil their obligations led to actual damages
If any of these elements are absent, you may have difficulty holding up your claim. If any of these is missing or you may have difficulty proving them, consult with your attorney first to know if you have a clear-cut case.
Elements of a Valid Contract
It may vary slightly depending on your state, but in Texas, a contract is recognized as valid when it contains these four elements:
- a clear offer
- acceptance of that offer
- consideration (something of value exchanged by both sides)
- and mutual agreement
While verbal agreements are valid and enforceable in Texas under certain circumstances, it’s not typically easy to prove the terms you agree to in a verbal contract. However, with written contracts, the evidence is the agreement document.
Common Red Flags and Issues That Can Void a Contract
Another important thing to note is that just because it’s a written and documented contract doesn’t mean it’s valid. Here are the most common red flags people miss that can void a contract:
- Fraud or misrepresentation: If one party made false statements to induce the other into signing, the agreement may be voidable.
- Duress or coercion: A contract signed under threat or extreme pressure isn’t considered a free and voluntary agreement and may be rendered void.
- Lack of capacity: If one of the parties is a minor or can be proven to be mentally incapable of making decisions, they can’t agree to a binding contract under Texas law.
- Illegality: If the contract requires you or the other party to do something illegal, it’s unenforceable.
- Mutual mistake: If either of the parties that agreed was wrong about a fundamental fact when you signed the agreement, this means the contract may not accurately reflect what was actually agreed to and can render the contract void.
- Unconscionability: If the contract is one-sided and obviously oppressive to one of the parties in the agreement, enforcing it would be fundamentally unfair and could result in a void contract.
💡Pro Tip: Even if any of these conditions fit your situation, don’t assume that thecontract is automatically unenforceable, confirm with an attorney.
Types of Contract Disputes in Texas
These are the most common types of contract disputes you can litigate in Texas:
- Business-to-Business Contract Disputes: This is the most common type, e.g dispute on vendor-supplier agreements, service contracts, licensing arrangements, distribution deals, etc.
- Employment and Non-Compete Agreement Disputes: If an employee goes against their employment contract, the company can sue for breach of contract. Also, if the terms of the non-compete agreements are deemed unreasonable, the employee can get a contract dispute lawyer to void the agreement.
- Real Estate and Lease Contract Disputes: This is also fairly common for both commercial and residential lease contracts. If one of the parties fails to fulfill their own side of the bargain, e.g., purchase agreement failures, boundary or easement disagreements, they sue for a breach of contract.
- Service and Vendor Agreement Disputes: As a business or individual, if a contractor doesn’t complete their work or deliver work that’s less than the quality you agreed on, you can sue.
- Construction Contract Disputes: This could have been under business-to-business contract disputes, but construction has its own category because it’s a unique industry with multiple layers, such as owners, general contractors, subcontractors, and suppliers.
What Are My Rights If a Contract Is Breached?
Under Texas law, you have the right to pursue legal remedies should the other party fail to honor a valid contract. However, this only applies if your lawsuit hasn’t passed its statute of limitations.
In Texas, you generally have four years from the date of breach to file a lawsuit. Miss that window and you lose your right to sue, regardless of how clear-cut the breach was.
Remedies for Breach of Contract: What Damages Can You Recover?
It heavily depends on your situation. The damages you get to recover depend on the nature of the contract, the kind of breach, and the losses/consequences you can prove occurred as a result of the breach.
The following are some of the most common remedies:
- Compensatory Damages: You’re most likely to get this if the breach cost you financially. It also doesn’t have to be direct losses; if the loss was consequential, such as you losing customers because the other party failed to perform their duties, it’s a consequential financial loss.
- Specific Performance: In cases where the best solution isn’t just to pay damages, the court can order the other party to fulfill their side of the contract.
- Rescission and Restitution: In some contract litigation, the most equitable remedy for the breach is Rescission and Restitution. Rescission cancels the contract and attempts to restore both parties to where they were before it was signed. If you paid money under a contract that turns out to be voidable, restitution requires the other side to return what they received. This is mostly used to resolve disputes where there’s a fundamental defect in the contract itself, and sometimes, fraud cases.
- Liquidated Damages: Some contracts already include clauses specifying in advance what damages will be owed if a breach occurs. This is typically a smart move that protects all the parties involved, and if Texas courts find it to be a reasonable estimate of damages, they will enforce these provisions. However, if it’s unfair, the clause may not hold up in court.
How to Handle a Contract Dispute in Texas
Even with the best intentions, contract disputes still happen, but here are some steps that can help you prevent contract breaches for individuals and businesses:
Step 1: Document Everything
While oral contracts exist and are enforceable, it can be difficult to prove the agreement without any evidence. So, make sure to document all your communications and agreements related to the contract. This includes the contract itself, emails, texts, meeting notes, invoices, etc.
Step 2: First Attempt Direct Resolution or Negotiation
Contrary to popular belief, you can get an equitable remedy for breach of contract. You can settle without a court case if you’re able to communicate with the other party about what was agreed to, what caused the failure to perform the contractual obligations, and what you’re asking for as compensation.
While you may not necessarily need a litigation attorney during negotiations, what you say during negotiations can affect your legal position; it’s advisable to go with an attorney to represent you.
Step 3: Explore Alternative Dispute Resolution
If negotiations with the other party don’t work out the way you intended, you can opt for alternative dispute resolution methods like mediation or arbitration before taking the case to court.
Mediation allows you to agree with a third-party present that doesn’t seek to push one party’s interest over the other, but allows you to communicate and come to a conclusion. The negotiations are non-binding till a legal agreement of the settlement is signed.
Arbitration, on the other hand, is a formal and often legally binding process that closely resembles a mini-trial, with a neutral third party serving as a private judge. You and the other party present your evidence, documents, and testimonies. Next, the arbitrator reviews the facts and makes a final decision that is usually binding.
Step 4: Consult an Experienced Contract Dispute Attorney
If, after trying negotiations and alternative dispute resolution, you are still not satisfied with the decision, the next step is to seek experienced legal counsel. A contract attorney can assess whether you have a strong claim, identify possible legal and financial remedies, outline any defenses the other side is likely to raise, and advise on the most practical strategy to win the case.
Step 5: File a Breach of Contract Claim or Lawsuit
If your attorney confirms you have a strong claim and has a practical legal strategy for your case, you can go forward to file a breach of contract lawsuit. Also, filing a lawsuit doesn’t necessarily mean you will have to go to trial,
How Can a Contract Dispute Attorney Help You?
While it’s possible to handle a contract dispute without an attorney, it’s rarely advisable to do so. You’re giving the other party an advantage if they have their own attorney or understand the law and how it pertains to your contract better than you do.
Here are the key areas where your attorney comes in:
- Reviewing and Interpreting Your Contract: Contract language is written in a way that you may not necessarily see any red flags unless you have some legal knowledge. Your attorney can look through your contract to see if you have any provisions that have been overlooked, what you can gain from it, and where you stand before recommending next steps.
- Negotiating a Resolution on Your Behalf: Sure, you could handle your own negotiations, but having an attorney handle negotiations protects you from saying things that could put you at a legal disadvantage. It also signals to the other side that you’re serious, which changes the dynamic considerably.
- Representing You in Court or Arbitration: If the dispute goes to litigation or arbitration, you need someone who knows how to build and present a case. That means understanding the rules of evidence, knowing how to conduct discovery, and being ready to try a case if a settlement doesn’t happen.
Book a consultation with MCIS Law
How to Avoid Contract Disputes Before They Start
Most contract disputes are predictable. The disputes that end up in court often trace back to contracts that were vague, one-sided, or drafted without legal review.
Here are a few things that reduce the risk:
- Clearly outline performance obligations: Specify contract milestones and expectations with dates and numbers. If possible, provide a procedure for requesting an extension.
- Include clear dispute resolution procedures: Instead of going through a legal battle if a dispute arises, you already have a clear manual of what to do, so it doesn’t escalate to the point of lawsuits.
- Have your attorney review the contract before you sign; it’s a fraction of what it would cost if the agreement fails and ends in dispute. It’s always better to take preventive measures to ensure the contract is fair to you and reflects your expectations, than having to later dispute the contract.
The Bottom Line: Contact an Experienced Contract Dispute Attorney in Texas
If you’re in a contract dispute, it’s rarely a good idea to wait it out; the best thing is to have your attorney review the agreement and look for ways to settle it out of court. Waiting too long can even foreclose some of the options you could have explored if you started early.
Also, even if all you need is to ensure your contract is rock-solid to avoid future disputes, now is the right time to contact an attorney if all you need is to look through the agreement before you sign.
Ready to know what your options are?
Book a consultation with MCIS Law
Frequently Asked Questions: Contract Dispute Attorneys in Texas
How should you handle a contract dispute?
The first step is to gather all your relevant documents to know if there are any provisions for disputes and recommended resolution steps. After that, you can attempt negotiations, and if that isn’t feasible, you can move to alternative disputes resolutions methods like mediation and arbitration before filing a lawsuit. However, ensure you have an attorney to guide you.
How long does a contract dispute or lawsuit typically take to resolve?
It depends on the resolution method you choose to go with. Negotiations can take between weeks and months. Mediations typically take months, typically 3-6 months. Arbitrations take considerably longer compared to mediation and negotiations, often a year and even up to 3 years for complex cases.
How can contract disputes be avoided?
Don’t leave anything to chance or different interpretations. Clearly outline obligations, notice period, dispute resolution clause, and have an attorney review the agreement before you sign.
How much does a contract lawyer consultation cost?
It depends on the firm, case complexity, and attorney experience. The best way to get accurate information is to contact the firm directly.
