One of the biggest misconceptions about lawsuits is that someone must always do something wrong before a court can become involved.

That simply is not true.

Texas law allows courts to resolve many legal disputes before damages occur or before one party commits a breach of contract. The mechanism is known as a declaratory judgment, and it is governed by Chapter 37 of the Texas Civil Practice and Remedies Code.

Although declaratory judgment actions can be extremely useful, they are also frequently misunderstood. Courts will not issue advisory opinions simply because someone wants legal advice. Instead, there must be a genuine controversy that affects existing legal rights.

What Is a Declaratory Judgment?

Section 37.003 provides the basic authority for Texas courts to issue declarations.

It states:

"A court of record within its jurisdiction has power to declare rights, status, and other legal relations whether or not further relief is or could be claimed."

Tex. Civ. Prac. & Rem. Code § 37.003(a).

This language is significant because it allows a court to determine legal rights without necessarily awarding money damages.

Instead of asking:

"Who owes money?"

a declaratory judgment often asks:

"What do the parties' legal rights actually mean?"

Why Would Someone File One?

Declaratory judgment actions commonly arise when parties disagree about:

• interpretation of contracts
• real estate rights
• easements
• restrictive covenants
• ownership interests
• insurance coverage
• business agreements
• fiduciary obligations
• rights under wills or trusts
• validity of ordinances or statutes

Sometimes everyone agrees on the facts.

The disagreement is simply about what the law means.

Actual Controversies Are Required

Chapter 37 does not authorize courts to answer hypothetical questions.

Texas courts generally require:

• an actual controversy;
• between parties with adverse legal interests; and
• a declaration that will resolve that controversy.

Courts are not permitted to issue advisory opinions.

For example:

"I might someday sell this property."

is generally not enough.

But:

"My neighbor claims he owns an easement across my property."

may present an actual controversy suitable for declaratory relief.

Contracts Are a Common Source of Declaratory Judgment Actions

Section 37.004 specifically addresses contracts.

The statute provides:

"A person interested under a deed, will, written contract, or other writings constituting a contract...may have determined any question of construction or validity arising under the instrument."

This allows courts to interpret contracts before one side risks substantial damages by guessing incorrectly.

For example, parties might ask a court to determine:

• whether a non-compete clause is enforceable;
• whether a purchase agreement has terminated;
• whether an option has expired;
• whether a lease requires a particular repair;
• whether an indemnity provision applies.

Instead of breaching first and litigating later, the parties may seek clarity beforehand.

Property Disputes Frequently Use Declaratory Judgments

Declaratory relief is especially common in Texas real estate litigation.

Examples include disputes involving:

• boundary lines
• easements
• deed interpretation
• mineral reservations
• restrictive covenants
• homeowners' associations
• title questions

Sometimes no damages have occurred yet.

The parties simply need a court to determine what the governing documents actually mean.

Can the Court Award Additional Relief?

Yes.

Section 37.008 provides:

"Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper."

In other words, a declaratory judgment may be only the first step.

If necessary, the court may later issue additional orders enforcing the declaration.

Attorney's Fees Are Often an Important Consideration

One reason declaratory judgment actions receive so much attention is Section 37.009.

It provides:

"In any proceeding under this chapter, the court may award costs and reasonable and necessary attorney's fees as are equitable and just."

Unlike many statutes that make attorney's fees mandatory for the prevailing party, Chapter 37 gives the trial court considerable discretion.

The key phrase is:

"equitable and just."

That means a court may award fees in circumstances where doing so is fair, but it is not required to do so simply because one side technically prevails.

Declaratory Judgments Are Not a Shortcut Around Other Laws

One mistake lawyers sometimes make is attempting to plead a declaratory judgment claim solely to recover attorney's fees when another cause of action already governs the dispute.

Texas appellate courts have repeatedly limited attempts to use Chapter 37 merely as a vehicle for fee recovery.

If another statute fully resolves the dispute, a declaratory judgment claim may be dismissed as redundant.

For that reason, declaratory relief should serve a genuine purpose by resolving uncertainty about legal rights, not simply adding another claim to a petition.

Practical Examples

Declaratory judgment actions may be appropriate when:

• two business partners disagree about an operating agreement;
• neighbors dispute an easement;
• a buyer and seller disagree about obligations under a real estate contract;
• beneficiaries dispute the meaning of a trust provision;
• parties disagree whether a restrictive covenant remains enforceable;
• an insurer disputes coverage before paying a claim.

In each example, the primary issue is interpreting legal rights—not necessarily recovering damages.

Final Thoughts

Texas Civil Practice and Remedies Code Chapter 37 provides a powerful procedural tool for resolving genuine legal uncertainty before disputes escalate into more costly litigation. When parties disagree about what a contract, deed, statute, or other legal document actually means, a declaratory judgment action may provide the clarity needed to move forward. However, because Texas courts require an actual controversy and generally disfavor advisory opinions, these cases should be carefully evaluated before filing.

If you are involved in a dispute over a contract, real estate, business ownership, or another legal relationship and need guidance regarding your rights under Texas law, consulting with an experienced Texas attorney can help determine whether a declaratory judgment action is the appropriate remedy.

At David C. Barsalou, Attorney at Law, PLLC, we help clients navigate business, family, tax, estate planning, and real estate matters ranging from document drafting to litigation with clarity and confidence. If you’d like guidance on your situation, schedule a consultation today. Call us at (713) 397-4678, email barsalou.law@gmail.com, or reach us through our Contact Page. We’re here to help you take the next step.