Breach of Contract in Oklahoma: The Basics Every Business Needs to Know

Business moves fast. Deals are struck over lunch, partnerships form on a handshake, and invoices go unpaid while vendors promise "the check is in the mail." When a vendor fails to deliver, a partner refuses to pay, or a client disappears owing you money, understanding breach of contract law becomes essential. Whether you're suing to get paid or defending against a claim, Oklahoma contract law provides the framework for resolving these disputes.

This article explains the elements of a breach of contract claim in Oklahoma, the types of damages available, common defenses, the critical attorney fee statute that can shift the economics of litigation, and practical steps for businesses to protect themselves.

The Three Elements of Breach of Contract

To prevail on a breach of contract claim in Oklahoma, the plaintiff must prove three things:

1. Formation of a Valid Contract

A contract exists when there is:

• Offer: One party proposes specific terms
• Acceptance: The other party agrees to those terms
• Consideration: Something of value is exchanged (money, goods, services, promises)

Both parties must have the legal capacity to contract (adults of sound mind, not under duress), and the contract's purpose must be legal.

2. Breach

The defendant failed to perform their obligations under the contract. This could be:

• Total/Material Breach: A fundamental failure that defeats the core purpose of the contract (you ordered 1,000 red widgets, they sent 1,000 blue widgets)
• Partial/Minor Breach: A lesser failure that doesn't destroy the contract's value (the widgets arrived two days late)

3. Damages

The plaintiff suffered a quantifiable financial loss because of the breach. You cannot sue simply because you're upset—you must show actual harm.

Written vs. Oral Contracts

Written Contracts

Written contracts are the gold standard. They:

• Provide clear evidence of the terms
• Reduce "he said/she said" disputes
• Are easier to enforce in court

Oral Contracts

Oklahoma recognizes and enforces oral contracts for most transactions. However, oral agreements create proof problems—if the parties dispute what was agreed, the court must weigh credibility.

The Statute of Frauds

Under Oklahoma's Statute of Frauds (15 O.S. § 136), certain contracts must be in writing to be enforceable:

• Real estate transactions (sale or lease of land for more than one year)
• Agreements that cannot be performed within one year
• Promises to pay the debt of another (guarantees)
• Contracts for the sale of goods over $500 (under the UCC)
• Prenuptial agreements

If your contract falls into one of these categories and isn't in writing, it may be unenforceable—even if both parties agree it was made.

Types of Breach

Material Breach

A material breach is a substantial failure that goes to the heart of the contract. When a material breach occurs:

• The non-breaching party is excused from further performance
• The non-breaching party can immediately sue for damages
• The contract is essentially terminated

Example: You hired a contractor to build a warehouse. They build a smaller office building instead. You don't have to pay, and you can sue.

Minor Breach

A minor (or partial) breach is a failure that doesn't defeat the contract's purpose. When a minor breach occurs:

• The non-breaching party must still perform their obligations
• The non-breaching party can sue for damages caused by the minor breach
• The contract remains in effect

Example: The contractor builds the warehouse but finishes two weeks late. You still must pay the contract price, but you can deduct damages caused by the delay.

Anticipatory Breach

Sometimes a party announces—before performance is due—that they will not perform. This is anticipatory breach (or anticipatory repudiation).

Example: A supplier emails you in June saying they won't be able to deliver your October order. You can immediately sue or seek another supplier without waiting until October.

Damages in Breach of Contract Cases

Oklahoma law aims to put the non-breaching party in the position they would have been in if the contract had been performed. Several types of damages are available:

Expectation Damages (Benefit of the Bargain)

The primary measure of damages. What would you have received if the contract had been performed?

Example: You contracted to buy inventory for $10,000 and resell it for $15,000. The seller breaches. Your expectation damages are the $5,000 profit you would have made.

Consequential Damages

Foreseeable losses flowing from the breach that go beyond the contract's face value.

Example: Because the inventory didn't arrive, your factory sat idle for a week, losing $20,000 in production. If the seller reasonably foresaw this consequence, you may recover it.

Note: Many commercial contracts attempt to limit or exclude consequential damages. These "limitation of liability" clauses are often enforceable.

Reliance Damages

If expectation damages are hard to prove (e.g., a new business with no profit history), you may instead recover costs you incurred in reliance on the contract.

Example: You leased a building and bought equipment to fulfill a contract. The other party breaches before you earn any profit. You can recover your out-of-pocket expenses.

Liquidated Damages

Some contracts specify in advance what damages will be owed if a breach occurs. These "liquidated damages" clauses are enforceable if:

• The actual damages were difficult to estimate at the time of contracting
• The amount is a reasonable estimate (not a penalty)

Example: A construction contract provides $500/day for each day the project is late. This is likely enforceable.

Nominal Damages

If you prove breach but cannot prove actual damages, you may receive nominal damages (e.g., $1). This can be important for principle or when seeking attorney fees under fee-shifting statutes.

Affirmative Defenses

Not every broken promise is an actionable breach. Common defenses include:

No Valid Contract

The defendant argues there was no contract in the first place—no meeting of the minds, no consideration, or failure to satisfy the Statute of Frauds.

Performance Was Impossible

An unforeseen event made performance impossible (building destroyed by tornado, goods seized by government, death of a party whose personal services were required).

Force Majeure

Many contracts include "force majeure" clauses excusing performance when extraordinary events occur (natural disasters, pandemics, wars). Courts interpret these clauses narrowly and require the event to be specifically covered.

Waiver

The plaintiff waived the breach by accepting defective performance without objection.

Example: The contract required delivery by the 1st of each month. For six months, you accepted delivery on the 5th without complaint. You may have waived the right to sue for late deliveries.

Statute of Limitations

Oklahoma has strict deadlines for filing breach of contract claims:

• Written contracts: 5 years (12 O.S. § 95(1))
• Oral contracts: 3 years (12 O.S. § 95(2))

If you wait too long, your claim is barred.

The Attorney Fee Rule: 12 O.S. § 936

This is the most important—and least known—aspect of Oklahoma contract litigation.

Under 12 O.S. § 936, in certain types of contract disputes, the prevailing party is entitled to recover reasonable attorney fees:

• Labor or service contracts
• Sale of goods
• Promissory notes
• Leases (in some cases)

Why This Matters

In most civil litigation, each party pays their own attorney fees regardless of outcome. Section 936 changes that calculation dramatically:

• For plaintiffs: You can sue for a $10,000 unpaid invoice without losing money on legal fees. The defendant will owe your attorney fees if you win.
• For defendants: If you're sued on a weak claim and win, the plaintiff must pay your legal fees. This deters frivolous suits.
• Settlement leverage: Both sides know the loser pays fees. This encourages reasonable settlements.

The Flip Side

Section 936 is a two-edged sword. If you sue and lose, you'll owe the defendant's attorney fees on top of your own. This raises the stakes significantly and makes case evaluation critical before filing.

Preventing Contract Disputes

The best breach of contract case is one you never have to file. Sound contracting practices reduce disputes:

Get It in Writing

Always. Even with trusted partners. Memories fade, people leave companies, and circumstances change. A written contract prevents "he said/she said."

Define the Essential Terms

At minimum, address:

• Who: The parties (legal names, not nicknames)
• What: The goods, services, or obligations
• When: Deadlines, milestones, duration
• How much: Price, payment terms, late fees
• What if: Remedies for breach, termination rights, dispute resolution

Address Common Problems

• Change orders: How are modifications handled?
• Delays: What happens if performance is late?
• Disputes: Mediation? Arbitration? Litigation? Where?
• Attorney fees: Confirm Section 936 applies or add a fee-shifting clause.

Review Before Signing

Never sign a contract without reading it carefully. "I didn't read it" is not a defense. Consider having an attorney review significant agreements.

Frequently Asked Questions

Can I sue over a text message agreement?

Possibly. If the text messages establish offer, acceptance, and consideration—and the contract doesn't fall under the Statute of Frauds—they may be enforceable. Courts look at the parties' intent as expressed in the messages.

What if the contract has an arbitration clause?

Many commercial contracts require arbitration instead of litigation. If your contract has such a clause, you may be required to arbitrate rather than sue in court. Arbitration has different procedures, costs, and strategic considerations.

Can I recover for breach if I also breached the contract?

It depends. If both parties breached, courts examine who breached first and whether the breaches were material. A minor breach by you doesn't necessarily excuse a material breach by the other party. These "battle of the breaches" cases are fact-intensive.

What's the difference between breach of contract and fraud?

Breach of contract: "You promised to deliver widgets and didn't." Fraud: "You never intended to deliver widgets—you lied to steal my money."

Fraud requires proof of intentional misrepresentation and is harder to prove but may open additional damages (including punitive damages).

Do I need an attorney for a small claim?

Oklahoma's small claims court handles disputes up to $10,000 with simplified procedures. However, even "small" disputes can become complicated. An initial consultation can help you understand your rights and decide whether to proceed.

---

Contract disputes are a fact of business life. Understanding how Oklahoma law allocates risk and remedies—especially the attorney fee rule—helps you make informed decisions about both contracting and litigation.

At Addison Law, we advise businesses in general counsel matters and litigate breach of contract claims when disputes cannot be resolved. We can review your contracts, evaluate potential claims, and represent you in court or arbitration when necessary. Contact us to discuss your situation.

---

This article is for general information only and is not legal advice.