What You Have to Prove in a Texas Breach of Contract Case

The four elements, as Texas courts state them

The Texas Supreme Court describes the claim in four parts: (1) a valid contract, (2) performance or tendered performance by the plaintiff, (3) breach by the defendant, and (4) damages sustained as a result of the breach. The court has called breach an essential element and has addressed when the claimant's own readiness to perform must be established, so both sides' conduct is in play from the start.

Each element is a separate question of proof. The sections below take them in order and say what usually decides them.

Element one: was there a valid contract?

A contract exists in Texas when there was an offer, an acceptance, a meeting of the minds on the essential terms, each party's consent to those terms, and consideration (each side gave or promised something). The agreement can be written, oral, or formed by conduct, unless it falls within the statute of frauds in Business and Commerce Code section 26.01, which requires a signed writing for categories such as real estate sales and agreements that cannot be performed within one year.

The usual fight is over definiteness. A court will not enforce an "agreement to agree" or fill in terms the parties never settled, such as price, quantity or scope, unless the contract supplies a way to determine them. Letters of intent, term sheets and email chains are where this element is most often lost. The question is whether a reader could tell what each side was bound to do.

Element two: did you perform, or offer to?

You must show that you did what the contract required of you, or that you were ready, willing and able to do it and the other side's conduct prevented it. A tender of performance ("we were ready to ship on the date; you refused delivery") satisfies this element when actual performance was blocked.

This is where a defendant looks hardest at the claimant's own record: late deliveries, incomplete work, missed notices. A small shortfall does not defeat the element, but a material failure by the claimant can excuse the defendant entirely. The distinction is discussed in material breach versus minor breach.

Element three: did the other side breach?

A breach is a failure to perform a duty the contract imposes, without legal excuse. It can be a failure to pay, to deliver, to meet a specification, to meet a deadline that the contract made essential, or a clear statement in advance that the party will not perform (a repudiation).

Proof starts with the contract language. The court reads the words the parties used, in context, and gives them their plain meaning. If a term is ambiguous, meaning it has two reasonable readings after the whole document is considered, outside evidence of what the parties intended becomes admissible. Most breach disputes are decided by the contract's own text and by the documents showing what was and was not done.

Element four: did the breach cause damages?

You must show a loss, and that the breach caused it. Damages for breach of contract aim to put you where performance would have left you: the price you did not receive, the cost of obtaining the performance elsewhere, and consequential losses such as lost profits when they were foreseeable and can be proved with reasonable certainty. Speculative or unsupported figures fail this element even when the breach itself is clear.

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

Example

Suppose a Fort Worth distributor agrees by email to supply a manufacturer with a component at a set price for twelve monthly shipments. After four shipments the distributor announces a 30 percent price increase and stops shipping when the manufacturer refuses. The manufacturer buys the component elsewhere at a higher cost. Element one: the emails fix price, quantity, timing and the parties, so a contract exists and the UCC's writing rule is likely satisfied. Element two: the manufacturer paid for each shipment on time. Element three: the refusal to ship at the agreed price is a breach. Element four: the difference between the contract price and the replacement price, plus any documented downstream costs, is the loss. Each element has a document behind it.

Who proves what

The claimant carries the burden on all four elements by a preponderance of the evidence, meaning more likely than not. The defendant carries the burden on affirmative defenses it raises, such as the statute of frauds, limitations, waiver, accord and satisfaction, or prior material breach, which must be pleaded under Texas Rule of Civil Procedure 94. A claimant who proves the four elements can still lose if the defendant proves a defense. The common ones are set out in common defenses when a business is accused of breaching a contract.

Evidence that carries each element

Preserve all of it now, including text messages and the versions of documents that show what changed. Deleted or missing records are a problem for the party that should have kept them.

When the elements point to a different claim

Sometimes the facts fit another theory better. If there was no enforceable contract but you provided value the other side kept, quantum meruit or unjust enrichment may apply. If the other side lied to get you to sign, fraudulent inducement is a separate claim with different damages. If a third party caused the breach, tortious interference may be available. A litigator's early job is matching the facts to the claim with the strongest proof and the best remedy, and pleading the alternatives where the facts are uncertain. The breach of contract practice page describes how contract disputes are handled at each stage.