Contract Disputes

What Is Legally Considered a Contract? A contract is a legally enforceable promise between two parties. There needs to be an exchange of value between them, such as goods, services, or money. Both parties in the contract must also provide something of value, known as “consideration.” In many contracts, the consideration is money, but it can also be anything that has value.

Contracts must also have a legal purpose, meaning an agreement is unenforceable if it requires one of the parties to violate the law. Also, parties must be legally capable of signing a contract for it to be enforceable. For instance, an agreement cannot be enforced in Texas if a minor signed it. Nor can you implement a contract if the party lacks the mental capacity to sign.

Texas legal contracts are usually written, but some can be verbal. However, certain specific contracts must be in writing, such as real estate sales, leases exceeding one year, and sales of products over $500. It is usually a smart practice to have a contract in writing to reduce the chances of disputes.

Types of Contract Disputes

There are many types of contract disputes, including the following:

• Insurance Coverage Disputes. An insurance policy is a contract, and often, insurance companies deny coverage or limit coverage in violation of the terms of the policy. This often leads to insureds filing lawsuits against the insurance company.
• Commercial leases. Language in commercial leases can lead to disputes, such as when a business rents space or the owner wants on-time rent payments from tenants.
• Non-compete agreements. Some employers want workers to sign NDAs, which start when they sign their employment contract. An NDA might state, for example, that the employee agrees not to work in the same field for another employer for some time.
• Non-disclosure agreements (NDAs). NDAs may be used if one party wants a quote for work to be performed on something cutting-edge or with a patent pending. The agreement might be disputed if the signee allegedly leaked important information.
• Sale of goods contracts. Often signed between a merchant and supplies, these contracts are often disputed in liquidated products and wholesale transactions. Some vendors simply do not ship the products as required by contract.
• Consumer contract disputes. A manufacturer promises a product that does not contain hazards or defects, but a contract dispute may result if they do not honor the warranty.
• Material breach. Refusal to follow the contract terms and damages in these cases can be considerable.

What Exactly Constitutes a Breach of Contract?

A breach of contract may occur when there is a violation of any agreed-upon conditions and terms of the agreement. The breach can be relatively minor, such as late delivery or payment, or something more severe, such as not delivering products as promised. Most breaches of contract cases are of two types:

• Minor breach. A minor breach may happen when you do not receive a product or service by the due date. For example, a vendor promises to deliver a pallet of bottled water by the 15th but arrives on the 16th. Unless the date of delivery was expressly made a material term (for instance, if the delivery was for an event occurring on the 15th), this breach probably did not cause any damage.
• Material breach. A material breach happens when you receive something materially different from the contract or don’t receive the goods or services. Suppose your real estate company ordered 5,000 sales brochures and received coffee mugs instead.

In Texas, a breach of contract case can involve both written and verbal contracts, and parties can either resolve the matter between themselves or engage in litigation.

What to Do if a Breach Has Occurred

If there has been a potential breach of contract, the plaintiff wanting to file suit must prove that there was a valid contract between the parties. You also must show how the other party hasn’t met the contract requirements. The easiest way to prove a contract exists is to keep a document that both parties signed, but you may be able to enforce a verbal contract. However, some contracts, such as those for selling or transferring land, must be written for them to have legal weight.

If the case is litigated, the appropriate court will review the contractual obligations of the parties to decide if there was a breach. The court also will review the contract to check if it contains anything that could have triggered a breach. Usually, you have to inform the defendant in writing that they have breached a contract before taking legal action.

How Can You Avoid a Contract Dispute?

Breach of contract lawsuits is expensive and time-consuming, and it is best avoided by having a contract dispute attorney write and review your company contracts. A solid contract has the following attributes:

• The contract language should be precise and concise. If the other party isn’t a native speaker, it may be necessary to contract with an interpreter to ensure everything is clear and understood.
• You and the other party should grasp the contract’s expectations and that you can both fulfill them.
• For the contract to be binding, it has to be legal when the parties sign it. If you are uncertain, working with a contract law attorney on the document is recommended.

If you have a contract dispute, Paul N Jones’s litigation and negotiation skills can help you achieve the best outcome.

Contact Paul N Jones Law Firm Today