law-failure of consideration | contract formation |
FAILURE OF CONSIDERATION
Failure of consideration occurs when, due to a supervening cause after an agreement is
reached, the promised performance fails. See City of The Colony v. North Tex. Mun.
Water Dist., 272 S.W.3d 699, 733 (Tex. App.-Fort Worth 2008, pet. dism'd); U.S. Bank,
N.A. v. Prestige Ford Garland Ltd. P'ship, 170 S.W.3d 272, 279 (Tex. App.-Dallas 2005,
no pet.). In other words, failure of consideration occurs because of subsequent events. See
The Colony, 272 S.W.3d at 733. For example, one party's failure to perform its obligations
under the agreement may result in the other party's failure to receive the consideration set
forth in the agreement. See id.; U.S. Bank, 170 S.W.3d at 279.
To establish the affirmative defense of failure of consideration, the defendant must offer
summary-judgment proof establishing: (1) the consideration for the property at the inception
of the agreement; and (2) that the consideration later failed. See, e.g., National Bank of
Commerce v. Williams, 84 S.W.2d 691, 692 (Tex. 1935).
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