Two Galveston-based vehicle towing companies filed a lawsuit alleging the city breached their contract.
Ace of Galveston and 51st Street Towing were part of a rotation system that allowed different companies to tow away vehicles. Each company received a number from the city, and when their number was at the top of the list, that company was sent to remove a vehicle. A city ordinance devised the rotation system.
City revoked their permits
The city revoked both companies’ tow service rotation permits three months prior. The companies allege it occurred because a person at the vehicle storage facility overcharged for towing. They state that they did not overcharge anyone.
Companies claim the breach hurt their business
Since the revocations, Ace of Galveston and 51st Street Towing state they suffered a significant loss of income.
A contract must be valid
To prove breach of contract, a business must show a valid contract existed. A valid contract includes an offer, something of value offered in return, an agreement about basic terms of the contract and then an acceptance of the contract through actions, words or deeds.
A breach includes a failure to perform part of the contract
After establishing a valid contract, a breach is proven by showing that one party performed his or her part of the contract, the other party did not perform his or her part and the failure damaged the first party.
A breach must also be a material breach. A material breach deprives the party of benefit he or she was contracted to receive.
