Breach of contract in Texas: the elements, the clock, and the money.
A breach of contract claim in Texas has four elements: a valid contract, your performance, their failure to perform, and damages that follow from it. The lawsuit deadline is four years, and it starts earlier than most owners think. Here is the claim from both sides, in the order the questions actually come up.
The four elements, and where each fight actually happens
1. A valid contract. Offer, acceptance, mutual assent, consideration. In business disputes this element is contested less than owners fear; emails, invoices, and course of dealing routinely add up to an enforceable agreement. The fight here, when it comes, is usually about which terms made it in, which is why the paper trail matters more than the handshake memory.
2. Your performance. You did your side, or tendered it. This is where defendants hunt: a claimant who cut corners on their own obligations hands the other side a prior-material-breach defense that can excuse everything after it.
3. Their breach. A failure to perform without legal excuse. Texas distinguishes material breach, one that defeats the contract’s core purpose and releases you from further performance, from minor breach, where you still get damages but stay bound. Call it wrong in the heat of the moment, walk off a contract over a minor breach, and you can convert yourself into the breaching party. There is also anticipatory breach: a clear statement they will not perform, which lets you act before the due date arrives.
4. Damages. Measurable loss caused by the breach. This is where most weak claims die and most strong claims get underpaid. Document as you go, not at lawsuit time.
The four-year clock, and where it actually starts
Texas gives you four years to sue, under Chapter 16 of the Civil Practice and Remedies Code. Three details do real work in practice.
The clock runs from the breach, not the discovery. The Texas Supreme Court said so in Via Net v. TIG Insurance: for ordinary contract claims, accrual is at breach, and the discovery rule rarely rescues a late claim. An owner who learns in year five about a year-one breach is, in most cases, simply out of time.
Your contract may have shortened it. Parties can agree to a shorter period, down to a floor of two years under Section 16.070; anything shorter is void. Commercial contracts, insurance policies, and construction agreements use these clauses routinely, and courts enforce them.
Goods run on their own rule. Contracts for the sale of goods fall under Business and Commerce Code Section 2.725, four years again, but with a floor the parties can lower to one year by agreement. If your dispute is about delivered product rather than services, read the sales terms before you calendar anything.
What you can recover
The default measure is expectation damages: the money that puts you where performance would have. On top of that, consequential damages, lost profits downstream of the breach, are recoverable when they were foreseeable to both parties at contracting, which is why the savviest thing in many contracts is the clause limiting them. Specific performance, a court order to actually perform, is reserved for cases where money cannot substitute, real estate being the classic. Liquidated damages clauses are enforced when they were a reasonable forecast of hard-to-measure loss, and struck down as penalties when they were a hammer dressed as a forecast.
And Texas adds the recovery that changes settlement math: attorney’s fees on contract and services claims under Chapter 38, if the claim was presented properly and thirty days passed without payment. That procedure usually happens through a demand letter, which is the reason the letter is worth doing right.
How these disputes actually unfold
Almost never with a lawsuit first. The sequence that plays out in practice: the breach surfaces; someone sends a demand letter (or, where the need is stopped conduct rather than payment, a cease and desist); thirty days of leverage arithmetic follow; and the matter settles, restructures, or files. The strategic version of that arc, when to fight, when to settle, what each stage costs, is mapped stage by stage in contract disputes in Texas. Larger commercial cases may qualify for the Texas Business Court, where specialized judges and written opinions are changing how these disputes get decided.
One call, either side of the claim
I handle Texas contract disputes from the first read of the agreement through the demand phase and settlement, for the party owed and the party accused, and I draft the contracts that keep clients off this page entirely. When a matter needs a trial team or a specialist, it moves to the right colleague at Scale LLP without you starting over. One relationship, one number: (682) 529-7177. Not sure where your situation sits? Start with How can I help?
Common questions
Four elements: a valid contract existed; you performed your side, or properly offered to; the other party failed to perform without legal excuse; and their failure caused you measurable damages. Every Texas breach case is won or lost inside those four boxes, and the fights are rarely where owners expect. The contract's validity is contested less often than performance and damages.
Four years, under Chapter 16 of the Civil Practice and Remedies Code. The trap is where the clock starts: it generally runs from the date of the breach, not from when you discovered the problem, a rule the Texas Supreme Court confirmed in Via Net v. TIG Insurance. Contracts can shorten the period by agreement, but not below two years, and contracts for the sale of goods run under a separate four-year rule that parties can shrink to one. Read your contract before you assume you have four years, and never assume the clock waits for your discovery.
Proving a breach is often the easy part. The hard parts are damages, proving them with the precision Texas courts require, and collection, because a judgment against a defendant with no reachable assets is paper. That is why the practical evaluation runs backward: what would you recover, from whom, at what cost, before what happened and who is at fault. A claim strong on liability and weak on damages usually belongs in a negotiation, not a courtroom.
Money, mostly. Texas courts award expectation damages that put the injured party where performance would have, plus consequential damages when they were foreseeable, plus attorney's fees on most contract claims when the procedure was followed. Where money cannot fix it, courts can order specific performance, most often in real estate. What breaching does not do, on its own, is create criminal exposure: breach of contract is civil. Fraud is a different matter with different consequences, and the line between the two is where a breaching party should be paying close attention.
Usually yes, and it is one of the few places Texas law tilts plainly toward the claimant. Chapter 38 of the Civil Practice and Remedies Code allows a winning claimant to recover reasonable attorney's fees on contract and services claims, provided the procedure was followed: representation by an attorney, written presentment of the claim, and thirty days without tender of the amount owed. The demand letter is how that procedure usually gets satisfied, which is why it is worth sending correctly.
The recurring ones: the other side materially breached first, which excused your performance; the claim is outside limitations; the contract required a writing it never got, under the statute of frauds; the term they are suing on was waived or modified by how the parties actually did business; and the damages claimed are speculative or were never mitigated. A defendant with one of these in hand often turns a demand into a negotiation. Which is the point of evaluating before responding.
The clock is probably already running. The question is what to do with the time.
The words you'll hear
If this goes further, these are the terms that will come up, from us or from the other side. Each one links to a fuller explanation.
- Consequential Damages
- Consequential damages compensate losses that flow from a breach but do not follow necessarily from it, so they are recoverable only if they were within the....
- Liquidated Damages
- A contractual provision specifying the amount of damages payable on breach, fixed in advance by the parties' agreement.
- Specific Performance
- Specific performance is a court order compelling a party to do what it promised rather than pay for not doing it.
- Statute of Frauds
- The doctrine that certain categories of contracts are unenforceable unless evidenced by a writing signed by the party to be charged.
- Statute of Limitations
- A statute that bars a cause of action after a specified period from accrual.
- Discovery Rule
- The discovery rule defers the start of limitations until the claimant knew or should have known of the injury.