Breach of Contract

Contracts are the bedrock of American business. They establish clear terms for the obligations each party will take on, and outline the consideration the other party will provide in exchange. They clarify mutual responsibilities and, in many cases, lay the groundwork for long-term, fruitful business relationships. The disruptions caused by a breach of contract are commensurate with the centrality of contracts to business operations, and any breach demands a prompt response. The most appropriate legal path forward will depend on the circumstances and, of course, the terms of the contract itself. 

At Kretzer & Arnett, our attorneys represent individuals and businesses in breach of contract disputes throughout Houston and across Texas. Whether you are seeking to enforce an agreement or defending against allegations of breach, we can review your contract, evaluate your legal options, and take swift action to protect your interests. Call Kretzer & Arnett today to schedule a consultation to review your contract terms and discuss the nature of your dispute.

Demand Letters in Contract Disputes

Demand letters serve two important purposes. First, they formally notify the breaching party of their failure to comply with the contract and request corrective action. Second, they create a clear paper trail of the non-breaching party’s attempts to reach a satisfactory solution out of court and before filing a lawsuit. 

If the breach is not corrected, demand letters can become part of the evidence presented in court to establish notice and good faith efforts to resolve the dispute.

A well-drafted demand letter typically includes:

  • A specific demand for performance or payment, required of them under the terms of the contract
  • Reference to the contractual provisions that have been violated
  • A deadline for compliance
  • Notice that legal action may follow if the demand is not met

Even though business leaders are generally aware of the terms of their contracts and how the other party may be falling short, having an attorney prepare or review a demand letter helps ensure accuracy, clarity, and strategic positioning if litigation becomes necessary.

What to do if you receive a demand letter

If a lawsuit has already been filed, a demand letter is often the precursor to litigation and should be taken seriously. Still, it also creates an opportunity to resolve the dispute before court involvement becomes necessary.

If you receive a demand letter alleging breach of contract, consider the following steps:

  • Do not ignore the letter.  Failing to respond may encourage the other party to proceed directly to litigation. 
  • Do not admit fault prematurely.  Statements made in response to a demand may later be used as evidence. 
  • Review the contract carefully.  The validity of the claim depends on the actual contract terms, not just the assertions in the letter. 
  • Preserve all related documents and communications.  Emails, invoices, amendments, and performance records may become critical evidence. 
  • Consult a contract dispute attorney promptly.  An attorney can evaluate whether the claim has legal merit and advise on whether negotiation, formal response, or immediate defense strategy is appropriate. 

In many cases, disputes can be resolved through negotiation or clarification of obligations.  In others, early intervention is necessary to protect against escalating liability, injunction requests, or claims for damages.   

Cease and Desist Letters

In some contract disputes, the problem is not failure to act, but prohibited conduct that must stop immediately. A cease-and-desist letter is appropriate when a party is violating contractual restrictions or legal rights. Contracts often include provisions that restrict certain conduct, not just performance obligations. 

Common Uses of a Cease-and-Desist Letter

Common examples of situations in which a company might need to send a cease-and-desist letter include:

  • When an employee or contractor is violating the terms of a nondisclosure agreement or confidentiality agreement
  • When the licensee of protected material is inappropriately distributing the material beyond the scope of their license (improper use of licensed materials)
  • When a competitor is making untrue and damaging statements about the business (defamatory statements)
  • When any party is inappropriately using a company’s trademark to refer to generic goods, or as a part of their own marketing activity (trademark misuse or false advertising)
  • When a company’s debt collection strategy devolves into a harassment campaign
  • Breach of non-solicitation agreements

There can be other circumstances that also call for a cease-and-desist letter. These letters demand that the wrongful conduct stop and warn that legal action will follow if it continues. 

Effective cease and desist letters typically contain:

  • A clear statement and description of the objectionable activity
  • A formal demand that the activity stop
  • An explanation of the legal basis for the demand
  • A threat to take legal action (i.e., file a complaint or petition with a civil court) if the specified activity does not stop
  • A deadline for compliance

An attorney with Kretzer & Arnett may be able to advise you on an appropriate timeline after reviewing the factors present in your particular case.

Noncompete Agreements and Contract Enforcement in Texas

Discourse in the business community around noncompete agreements has hovered at a low hum of concern for the past few years. The first two decades of the 21st century saw a rapid proliferation of noncompete clauses, partly because noncompetes were being used in a wider range of scenarios than had previously been typical and partly because the types of working relationships in which noncompete agreements commonly played a role were accounting for an increasingly significant share of contract activity.

Noncompete agreements remain a common feature of employment and business contracts in Texas, but their enforceability depends on strict legal standards. 

Under Texas law, noncompetes must: 1) be ancillary to an otherwise enforceable agreement, 2) protect legitimate business interests, and 3) be reasonable in time, geographic scope, and activity restrictions.

Current Regulatory Status of Noncompetes

As a result of broader concerns about the potential for overly broad noncompetes to chill economic activity and unduly burden talent in key industries, the Federal Trade Commission (FTC) issued an updated assessment of noncompete legitimacy in 2024 that would have rendered a large subset of noncompetes unenforceable. The new rule was duly challenged in court, and as of early 2026, the pre-2024 standard continues to guide FTC enforcement policy. Even with the “status quo” in place, however, business leaders and working professionals have often entertained concerns about their legal options, both immediately and going forward. Texas state law continues to govern most noncompete enforcement decisions.

Because both state and federal regulatory developments affect how courts view restrictive covenants, careful legal drafting and enforcement strategy are essential. 

Breach of contract cases can range from minor payment disputes to conflicts that threaten ongoing operations or professional reputations.  Whether you are seeking damages for breach, requesting injunctive relief, or defending against allegations of nonperformance, having experienced legal counsel can clarify your position and prevent costly mistakes. 

Some contract disputes are litigated in Texas state courts, while others may be heard in federal court under diversity jurisdiction when the parties are from different states, and the amount in controversy meets statutory thresholds.  Regardless of venue, the governing law is typically Texas contract law.

Call Our Houston Office Today

Breach of contract cases can be extremely frustrating. Even a relatively minor breach can lead to numerous headaches. A more serious matter, particularly one that threatens potentially irreparable harm, demands immediate action. The same is true if you have been wrongly accused of breaching a contract: Allowing the situation to remain unaddressed risks your business reputation and your company’s future.

In each of these circumstances, having an experienced business attorney review the terms of your contract and the circumstances that underpin the suspicions or allegations of a breach can give you a clearer idea of your options and of the urgency with which your business must act.

Our dedicated business lawyers handle contract matters between local businesses as well as those that fall under the jurisdiction of the federal court system. Schedule your confidential discussion with Kretzer & Arnett today.