Texas Southern University (a state agency) contracted with Virón for energy conservation services and equipment. When disputes arose, Virón sued TSU for breach of contract. TSU claimed sovereign immunity—a legal shield that protects government entities from lawsuits. The court ruled that TSU retains sovereign immunity even though it accepted equipment benefits, unless the state legislature explicitly waives that immunity. The case was sent back to the trial court to determine if TSU waived immunity through its own conduct.
Government entities like universities can claim sovereign immunity from contract breach lawsuits unless state law explicitly allows suits against them—check your client's legal status before contracting
Simply accepting benefits under a contract does not automatically waive a government entity's immunity; you need clear legislative permission or evidence the entity intentionally gave up its immunity
When contracting with state agencies, require explicit written waivers of sovereign immunity and dispute resolution clauses in the contract itself, as courts won't assume immunity was waived