Contract Cases Fare Better Than Torts Claims in Texas Appeals

Given the nature of tort reform laws in Texas, it is not surprising to find that cases on appeal related to contract disputes fared much better than cases based on tort claims.  During the Sept. 2010 to Aug. 2011 time frame, Texas Courts of Appeal reversed almost half of the lower court’s judgments based on tort claims (49%) versus a reversal rate of only one third (32%) in contract disputes.

Although this may seem like a fairly small variance, it is actually more significant than it appears at first blush. Due to enactment of Texas’ tort reform laws, the total number of tort claims has dropped significantly, as plaintiff’s counsel now choose to take more compelling cases to court. The Office of Court Administration in Texas has reported a 12% drop in the number of “injury or damage” cases filed from 2002 to 2010. So even the “better” tort claims have even odds of being reversed on appeal.

In summary, creditors should take extra pains to obtain signed agreements documenting the terms of the deal and should include a contract-based claim whenever possible. 

By: Cynthia W. Veidt

 

Source: Liberato & Rutter, “Reasons for Reversal in the Texas Courts of Appeal,” 48 Hous. L. Rev. 993 (2012).