Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Wednesday, February 27, 2013

When one party breaches the contract, is the other party excused from performing?

Tricky issue. Nonbreaching party has choices, but which is the best choice under the circumstances? Better consult an attorney promptly, lest the wrong choice is made unwittingly, unbenownst of the legal consequences in the event of subsequent litigation.  
"[W]hen one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance." Henry v. Masson, 333 S.W.3d 825, 840 (Tex. App.-Houston [1st Dist.] 2010, pet. denied). If the non-breaching party continues to insist on performance by the party in default, the previous breach by the breaching party is not an excuse for nonperformance by the non-breaching party and the contract continues in full force. Id. The non-breaching party, therefore, must choose between continuing performance and ceasing performance. Id.
Repudiation or anticipatory breach is an unconditional refusal to perform the contract in the future, which can be expressed either before performance is due or after partial performance. Van Polen v. Wisch, 23 S.W.3d 510, 516 (Tex. App.-Houston [1st Dist.] 2000, pet. denied). "To constitute a repudiation or anticipatory breach, the party to the contract must have absolutely repudiated the contract without just cause." Id.
SOURCE: HOUSTON COURT OF APPEALS - No. 01-11-01034-CV – 2/21/2013

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