SEECO and Southwestern Energy signed a three-year rock supply contract with K.T. Rock but purchased far less than expected. K.T. sued for fraud and breach; the jury awarded K.T. $2.5 million in damages plus $500,000 in punitive damages. The Texas appeals court threw out the fraud verdict due to insufficient evidence and sent the attorney's fees issue back to trial, finding SEECO was the prevailing party entitled to recover fees under the contract.
Fraud claims require solid evidence—vague or circumstantial proof won't survive appeal. Document all communications and representations clearly.
If you're the winning party on a breach claim, you may recover attorney's fees even if the other side's fraud claim fails. Include fee-recovery language in your contracts.
Purchasing less than anticipated doesn't automatically prove fraud. Courts look for specific false statements or intentional deception, not just changed business circumstances.