law-breach-of-contract-materiality | breach of contract elements |


PRIOR BREACH BY OTHER PARTY - MATERIALITY OF BREACH
IN BREACH OF CONTRACT ACTION - EXCUSE DEFENSE

"It is a fundamental principle of contract law that when one party to a contract commits a material breach of
that contract, the other party is discharged or excused from further performance." Mustang Pipeline Co. v.
Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004). However, when a breach is immaterial, the non-
breaching party is not excused from future performance and may sue only for the damages caused by the
breach. See Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 693 (Tex. 1994). Whether a party's breach of
contract is so material as to render the contract unenforceable is a question of fact to be determined by the
trier of fact based on the evaluation of several factors, including the extent to which the non-breaching party
will be deprived of the benefit that it could have reasonably anticipated from full performance. See
Hernandez, 796 S.W.2d at 693 n.2; Henry v. Masson, 333 S.W.3d 825, 835 (Tex. App.-Houston [1st Dist.]
2010, no pet.).

Ordinarily, the determination of whether there has been a material breach is a question for the jury. See
Hernandez, 796 S.W.2d at 693. But when it is clear that the parties intended that time be of the essence, the
failure to timely perform can be a material breach as a matter of law. See Mustang Pipeline, 134 S.W.3d at
196. Such an intention is not manifest from the language of this agreement. The contract only requires
"prompt" billing, and District 36's summary-judgment motion did not argue that time was of the essence.
Moreover, District 36 has not conclusively demonstrated that it was deprived of the benefit it reasonably
expected under the agreement. See Hernandez, 796 S.W.2d at 693 n.2; Herter v. Wolfe, 961 S.W.2d 1, 4
(Tex. App.-Houston [1st Dist.] 1995, writ denied). T

Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 693 n.3 (Tex. 1994) (reasoning that an insurer is
prejudiced where it is denied the opportunity to answer for the insured, litigate the merits of the suit, or
appeal any adverse judgment).

Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 693 (Tex. 1994) (“In determining the materiality of
a breach, courts will consider, among other things, the extent to which the nonbreaching party will be
deprived of the benefit that it could have reasonably anticipated from full performance.”).