Texas Demand Letter – Contract Performance (Specific Performance / Cure)

TEXAS DEMAND LETTER – CONTRACT PERFORMANCE AND CURE

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND EMAIL

1. HEADER

Date: [__/__/____]

TO (Breaching Party):
[________________________________]
Attn: [Registered Agent per Texas SOSDirect]
[________________________________]
[________________________________] (City, Texas ZIP)

FROM (Non-Breaching Party):
[________________________________]
[________________________________]
[________________________________] (City, Texas ZIP)

RE: DEMAND FOR PERFORMANCE / NOTICE TO CURE – [CONTRACT TITLE] dated [__/__/____] – FORMAL PRESENTMENT UNDER TEX. CIV. PRAC. & REM. CODE § 38.002

2. THE CONTRACT

On [__/__/____], [NON-BREACHING PARTY] and [BREACHING PARTY] executed [TITLE OF CONTRACT] (the "Contract"). Under the Contract, [BREACHING PARTY] is obligated to:

(a) [________________________________];
(b) [________________________________];
(c) [________________________________].

A copy of the Contract is attached as Exhibit A. The Contract is governed by Texas law pursuant to Section [____] thereof.

3. [NON-BREACHING PARTY]'S PERFORMANCE

[NON-BREACHING PARTY] has performed all material obligations required of it under the Contract, including:

• [________________________________]
• [________________________________]
• [________________________________]

All conditions precedent to [BREACHING PARTY]'s performance obligations have occurred, been performed, or been waived. See Tex. R. Civ. P. 54 (general performance of conditions precedent may be pleaded).

4. MATERIAL BREACH

[BREACHING PARTY] has materially breached the Contract in the following specific respects:

4.1 [describe breach – e.g., failure to deliver conforming goods under § [____]];

4.2 [describe breach – e.g., failure to complete the Work under Section [____] by the Substantial Completion deadline of [__/__/____]];

4.3 [describe breach – e.g., failure to provide adequate insurance certificates];

4.4 [describe any repudiation].

Under Texas law, a breach is "material" when it is so significant that the non-breaching party is justified in treating the contract as terminated. Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex. 2004). The factors include the extent to which the non-breaching party will be deprived of the benefit reasonably expected, the adequacy of compensation, the likelihood of cure, and the extent of forfeiture by the breaching party.

5. FORMAL DEMAND FOR PERFORMANCE / CURE

Pursuant to Section [____] of the Contract and Texas common law, [NON-BREACHING PARTY] hereby DEMANDS that [BREACHING PARTY] cure each of the breaches identified in Section 4 above by [__/__/____] (the "Cure Deadline"), which is [____] days after the date of this letter and satisfies both (a) the contractual cure period and (b) the 30-day presentment period required by Tex. Civ. Prac. & Rem. Code § 38.002 to preserve [NON-BREACHING PARTY]'s statutory right to attorney's fees under § 38.001.

Cure shall require:

☐ Delivery of [describe conforming performance];
☐ Payment of $[____________] in outstanding amounts;
☐ Execution and delivery of [document];
☐ Written assurance of future performance under Tex. Bus. & Com. Code § 2.609 (if goods);
☐ Other: [________________________________].

6. DEMAND FOR ADEQUATE ASSURANCE (UCC Art. 2 Transactions Only)

If the Contract involves the sale of goods, Tex. Bus. & Com. Code § 2.609 provides that when reasonable grounds for insecurity arise, the insecure party may in writing demand adequate assurance of due performance and, until such assurance is received, may suspend its own performance. [NON-BREACHING PARTY] has reasonable grounds for insecurity based on the facts described above and hereby DEMANDS ADEQUATE ASSURANCE of [BREACHING PARTY]'s due performance of the Contract within 30 days of receipt of this letter. Failure to provide adequate assurance within 30 days constitutes repudiation under § 2.609(d).

7. CONSEQUENCES OF FAILURE TO CURE

If [BREACHING PARTY] fails to cure by the Cure Deadline, [NON-BREACHING PARTY] intends, without further notice, to:

7.1 Treat the Contract as terminated for material breach and discontinue all further performance;

7.2 File suit in [____________] County, Texas (venue proper under Tex. Civ. Prac. & Rem. Code § 15.002 or § 15.035) seeking:

(a) Specific performance under Tex. Bus. & Com. Code § 2.716 (if goods are unique) or Texas equity jurisprudence, where monetary damages would be inadequate;
(b) Expectation damages measured by the benefit of the bargain;
(c) Consequential and incidental damages, to the extent foreseeable at contract formation (Hadley v. Baxendale as adopted in Texas; see Basic Capital Mgmt., Inc. v. Dynex Commercial, Inc., 348 S.W.3d 894 (Tex. 2011));
(d) Pre-judgment interest per Tex. Fin. Code Ch. 304;
(e) Post-judgment interest per Tex. Fin. Code § 304.003;
(f) Reasonable attorney's fees under Tex. Civ. Prac. & Rem. Code § 38.001 – recoverable because this letter constitutes formal presentment;
(g) Court costs and all other relief to which [NON-BREACHING PARTY] may be entitled.

7.3 Construction Context. If the Contract relates to construction or improvements to real property, [NON-BREACHING PARTY] reserves the right to file a mechanic's and materialman's lien under Tex. Prop. Code Ch. 53, subject to the pre-lien notice requirements of §§ 53.056 and 53.252 (residential).

7.4 Alternative Remedies. [NON-BREACHING PARTY] may alternatively cover (§ 2.712) or resell (§ 2.706) and recover the difference, or pursue any other remedies available under the Texas UCC, the Contract, or Texas common law.

8. STATUTE OF LIMITATIONS NOTE

Texas limitations for contract claims is four (4) years under Tex. Civ. Prac. & Rem. Code § 16.004(a)(3) (written contracts) and § 16.051 (residual). The limitations period for this claim began running on [__/__/____] and will expire on or about [__/__/____]. [NON-BREACHING PARTY] reserves all rights regarding tolling, continuing breach, and the discovery rule.

9. LITIGATION HOLD

[BREACHING PARTY] is hereby placed on litigation hold with respect to all documents, ESI, communications, project files, and other evidence relating to the Contract and its performance. Spoliation may result in adverse-inference instructions and sanctions under Brookshire Bros. v. Aldridge, 438 S.W.3d 9 (Tex. 2014) and Tex. R. Civ. P. 196.4.

10. RESERVATION OF RIGHTS

This letter is a settlement communication protected by Tex. R. Evid. 408 and is not admissible to prove liability except for purposes permitted by the rule (including proof of presentment under § 38.002). Nothing herein shall be construed as a waiver of any right, claim, or defense.

11. SIGNATURE

Respectfully,

_______________________________________
[SIGNATORY NAME]
[TITLE]
[NON-BREACHING PARTY]

cc: [ATTORNEY NAME], Texas State Bar No. [____________]

Enclosures: Exhibit A – Contract

Sources and References

• Tex. Civ. Prac. & Rem. Code §§ 38.001, 38.002 – Attorney's fees and presentment
• Tex. Civ. Prac. & Rem. Code § 16.004 – 4-year SOL
• Tex. Bus. & Com. Code §§ 2.609, 2.610, 2.712, 2.716 – UCC Article 2 remedies
• Tex. Prop. Code Ch. 53 – Mechanic's and materialman's liens
• Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex. 2004)
• Basic Capital Mgmt., Inc. v. Dynex Commercial, Inc., 348 S.W.3d 894 (Tex. 2011)