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 breach identified in Section 4 by [__/__/____] (the "Cure Deadline"), which is [____] days after the date of this letter. This letter is intended as presentment under Tex. Civ. Prac. & Rem. Code § 38.002. Section 38.002 requires representation by counsel, presentment to the opposing party or authorized agent, and no tender of the just amount owed before the 30th day after presentment; it does not prescribe a pre-suit waiting period.

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 within a reasonable time under the circumstances, not exceeding 30 days after receipt of this letter. Failure to provide adequate assurance within that period 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-.002 — if the claimant, valid listed claim, eligible defendant, attorney-representation, presentment, and non-tender requirements are satisfied;
(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 any available mechanic's and materialman's lien rights under Tex. Prop. Code Ch. 53, subject to current § 53.056 notice requirements, separate § 53.057 retainage rules, the original-contract date, claimant status, project classification, and all other perfection deadlines.

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

Tex. Civ. Prac. & Rem. Code § 16.051 supplies a four-year residual period when no more specific limitations provision applies. Section 16.004(a)(3) separately addresses an action on a debt; it is not a generic written-contract subsection. The limitations period for this claim may have begun running on [__/__/____] and may expire on or about [__/__/____], subject to current claim-classification, accrual, tolling, and discovery-rule law.

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

If and to the extent this letter constitutes compromise negotiations concerning a claim disputed as to validity or amount, Tex. R. Evid. 408 bars specified uses to prove or disprove the claim's validity or amount. The rule permits use for another purpose, including a legally relevant presentment purpose where otherwise admissible, and does not itself make this letter confidential or privileged. Nothing herein waives 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 § 16.051 – residual four-year limitations period
• 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)