Contract and Construction Law, Damages

Construction Dispute Austin Texas

Mar 16, 2013 — by Jeff Mundy
Tags: Contract Law



Applicable Law

A party breaches a contract when he fails to perform an act that he has expressly or impliedly promised to perform. Examination Mgmt. Svcs., Inc. v. Kersh Risk Mgmt., Inc., 367 S.W.3d 835, 844 (Tex.App.--Dallas 2012, no pet.). If the breach is material, the other party is discharged or excused from further performance. Mustang Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 198 (Tex. 2004). Whether a party's breach is so material as to render the contract unenforceable is ordinarily a question of fact to be determined based on several factors. Id. at 199. Some of these factors significant in determining whether a failure to perform is material include:

(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;

(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;

(c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;

(d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of the circumstances including any reasonable assurances; [and]

(e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.

Mustang Pipeline Co., Inc., 134 S.W.3d at 199, citing RESTATEMENT (SECOND) OF CONTRACTS § 241 (1981).


Ordinarily a fact question, waiver is the intentional relinquishment of a known right or intentional conduct inconsistent with claiming the right and may be satisfied by showing such conduct. Tenneco, Inc. v. Enter. Prod. Co., 925 S.W.2d 640, 643 (Tex. 1996); Sun Exploration & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987). 


Applicable Law

Ordinarily, a party cannot recover damages if it breaches a contract. Dobbins v. Redden, 785 S.W.2d 377, 378 (Tex. 1990). However, under the doctrine of substantial performance, a breaching party may recover damages if it has substantially complied with its contractual obligations. Tips v. Hartland Developers, Inc., 961 S.W.2d 618, 623 (Tex.App.--San Antonio 1998, no pet.). To recover damages under this doctrine, a breaching party must ordinarily obtain a finding that it substantially performed. Vance v. My Apartment Steak House of San Antonio, Inc., 677 S.W.2d 480, 481 (Tex. 1984). A breaching party, however, need not obtain a finding that it substantially performed in a case in which both parties breach and the jury, after being instructed to decide which party breached first, finds that the other party did and that its breach was unexcused. Tips, 961 S.W.2d at 623; see also Fuentes v. San Anastacio Dev. Ltd., No. 13-08-00743-CV, 2010 WL 2967158, at *2-3 (Tex.App.--Corpus Christi July 29, 2010, no pet.)(mem. op.)(holding that because jury found that defendant committed first material breach, plaintiff did not have to obtain jury finding on its substantial performance); Irving Flood Control Dist. v. Calgary Inc., No. 05-01-01462-CV, 2002 WL 1495017, at *1-2 (Tex.App.--Dallas July 15, 2002, no pet.)(not designated for publication)("The trial court's determination that the [defendant] breached the contract first renders whether [the plaintiff] substantially performed immaterial.").


Applicable Law

As a general rule, a plaintiff seeking "to recover the reasonable value of services rendered or materials supplied will be permitted to recover in quantum meruit only when there is no express contract covering those services or materials." Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988) [Emphasis added]. "There are instances when recovery in quantum meruit is permitted despite the existence of an express contract that covers the subject matter of the claim." Id. [Emphasis added]. In a dispute involving a contract case, such as the one here, a breaching plaintiff may recover in quantum meruit for the reasonable value of services less any damages suffered by the defendant. Id. at 937. "Central to the contractor's right to recover in quantum meruit is the owner's acceptance and retention of the benefits arising as a direct result of the contractor's partial performance." Id. [Emphasis added].

Equity also supports recovery in quantum meruit in this case. "To justify a recovery in quantum meruit, the plaintiff must . . . show that the defendant has been unjustly enriched and the plaintiff would be unjustly penalized if the defendant were permitted to retain the benefits of the partial performance without paying anything in return." Truly, 744 S.W.2d at 938 [Emphasis added]. 


Chapter 38 permits recovery of attorney's fees in a breach-of-contract case if the litigant prevails and recovers damages. See TEX.CIV.PRAC.&REM.CODE ANN. § 38.001 (West 2008); MBM Financial Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660, 666 (Tex. 2009). 

STR Constructors Ltd. v. Arch Insurance Co. (Tex. App. - El Paso, 2013)


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