Can I Sue Someone for Breaking a Contract in Texas?

When Texas law lets you sue over a broken contract

A breach of contract claim in Texas has four parts: a valid contract, your own performance (or a tender of it), the other side's failure to perform, and damages caused by that failure. The Texas Supreme Court treats breach as an essential element and has also addressed the claimant's own readiness to perform, so a court will look at both sides' conduct, not just the defendant's.

If those four parts are present, you have a claim. Whether the claim is worth filing depends on the amount, the evidence, and the other side's ability to pay. The elements themselves are covered in detail in what you have to prove in a Texas breach of contract case.

Does the contract have to be in writing?

Usually no. Oral agreements and agreements pieced together from emails, purchase orders and conduct are enforceable in Texas when the terms are definite enough for a court to apply them. The exceptions are in the Texas statute of frauds, Business and Commerce Code section 26.01: agreements that cannot be performed within one year, sales of real estate, leases longer than one year, and promises to pay someone else's debt must be in a signed writing. Sales of goods for $500 or more have their own writing requirement under section 2.201.

A verbal deal that falls outside those categories is enforceable, but harder to prove. See whether a verbal business agreement holds up in Texas for the categories and the exceptions.

What does a lawsuit get you that a demand letter does not?

A judgment. A demand letter asks; a judgment orders, and it can be enforced against bank accounts, receivables and property. A lawsuit also opens discovery, which forces the other side to produce documents and answer questions under oath.

The trade-off is cost, time and attention. Many contract disputes resolve after a well-supported demand letter because the other side sees the same evidence you do. Sending one before filing also matters for attorney's fees: Texas law lets a winning contract claimant recover fees, but only after the claim was presented and went unpaid for 30 days. That rule is explained in whether you can recover attorney's fees in a Texas contract case.

Where would the case be filed?

It depends on the amount and the parties. In Texas state court, justice courts hear civil cases up to $20,000 (Government Code section 27.031, as raised in 2020); larger claims go to county courts at law or district courts. A contract between a Texas company and an out-of-state company can end up in federal court when the parties are citizens of different states and more than $75,000 is at stake, under 28 U.S.C. section 1332.

The contract itself may answer the question. A forum selection clause can send the dispute to another county or another state, and an arbitration clause can take it out of court altogether. Read those clauses before deciding anything.

Example

Suppose a Dallas marketing agency signs a twelve-month services agreement with a regional retailer. Six months in, the retailer stops paying and says it is "pausing" the relationship. The agreement has no arbitration clause and says Texas law governs. The agency has a written contract, proof it delivered each month's work, a clear nonpayment, and invoices that fix the amount. Those are the four elements. The unpaid balance would decide which court hears it, and a presentment letter before filing would preserve the fee claim.

What can you actually recover?

Contract damages in Texas put you where you would have been had the contract been performed: the unpaid price, the cost of replacing the performance, and in some cases lost profits, if they can be proved with reasonable certainty. Punitive damages are not available for breach of contract alone. Interest and, in many cases, attorney's fees can be added.

The categories, what each requires and what is excluded are covered in what damages a business can recover for breach of contract in Texas.

How long do you have?

Four years from the breach for most contract claims in Texas, under Civil Practice and Remedies Code sections 16.004 and 16.051. Sales of goods have their own four-year rule in the UCC, and a contract can shorten the period to as little as two years. The clock starts when the breach happens, not when you discover it. The deadlines and the exceptions are in the article on how long you have to sue for breach of contract in Texas.

Questions to answer before you decide

• Can the other side pay? A judgment against a company with no assets is a piece of paper. Look at what you know about their business, property and insurance.
• Did you perform? If you also fell short, expect that to come back as a defense or a counterclaim.
• What does the contract say about disputes? Notice-and-cure provisions, arbitration clauses, forum selection, fee-shifting and damage caps all change the calculation.
• What is the relationship worth? Suing a customer or supplier you need next year has a cost that does not show up in a damages model.
• What evidence exists today? Emails, texts, invoices, delivery records and the people who can explain them. Preserve them now.

When to involve a litigator

Before the first letter goes out, if the amount matters to your business. The letter frames the dispute, starts the fee clock, and sets the tone for everything after it. A litigator will also tell you early whether the contract language, the evidence or the other side's finances make a lawsuit a poor investment, which is as useful as being told to proceed.

Tina Wysk represents businesses and individuals on both sides of contract disputes in Dallas state and federal courts and in arbitration.