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August 2012 Archives

Contracts: Enforcing Your Rights and Recognizing the Enforceability of Certain Clauses

The freedom to contract is a principal that is recognized under Texas law.  However, there are some limitations on a party's ability to contractually limit certain rights.  All legal disputes must be filtered through the rules of evidence.  Can parties to a contract change the rules of evidence that will apply in the event a dispute arises between the contracting parties?  The answer is most likely "no." Texas, like other states, has a code of evidence which provides rules and limitations on what types of evidence are admissible.  For example, the Texas Rules of Evidence have certain provisions relating to the admission of documents.  Could a contract limit the rights of one party to introduce into evidence certain types of documents in contravention of the Texas Rules of Evidence?  There is Texas case law that provides that "contract language abrogating fundamental rules of evidence is unreasonable, if not void, and will not be enforced."  Shultz v. American Nat. Ins. Co., 142 S.W.2d 275, 279 (Tex. Civ. App.--Beaumont 1940, writ dismissed).  While a contract may contain certain restrictions and limitations on a parties' rights, Texas law might provide that such contractual language is void. What if a contract is silent about a right?  For example, say a contract that is performable and enforceable in Texas does not address the recovery of attorney's fees?  Texas law, under Tex. Bus. & Com. Code § 38.0001 et. seq., provides that a prevailing party can recover its attorney's fees for breach of contract.  This is a statutory right that a prevailing party has on a breach of contract claim even if the contract sought to be enforced does not have a provision about the recovery of attorney's fees.

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