Texas Supreme Court grants review in important contracts case

Today the Texas Supreme Court announced it would accept review in Plains v. Torch, an important case addressing a fundamental question of contract interpretation: Should a dispute about the meaning of a contract be governed by the words of the contract or by vague notions of abstract justice?

Both parties argue that this case should be resolved according to the words of the contract. And that’s exactly what we asked the Texas Supreme Court to do in our brief in support of review. But the court below, as you may remember, sent this contracts case to a jury as an equitable claim so that the jury can distribute 43 million dollars according to its own conceptions of fairness.

The Texas Supreme Court’s decision to grant the petition is wonderful news. Replacing the words of the contract with after-the-fact judgments about “justice” would discourage parties from entering into contracts in the first place, thus limiting individual freedom.