Cuts in Clothing

You should watch a beginner-oriented tutorial on mesh editing (or a different one if the one you watched came with no proper explanation) for it is important to know what is responsible for what and the right terminology (otherwise you will have a hard time finding solutions to your problems). Cuts are not related to how textures are projected, they determine what will replace what in the package.

This is a matter of how the diffuse texture is being projected. The uv island is in the wrong place on the uv map, so it is projecting the wrong area of the texture.
- select all uvs and assign the texture to the background;

- to find the right uv island, enable sync and select a few faces in the problematic area in 3d view. You'll see that the island is not where it should be but the place meant for it is occupied;
- in uv editor select a face on the uv island that is occupying the back area, Select - Select linked to select the whole thing, press G,move it in the front area;
- select the misplaced uv island and put it in the back;
- if you will select the border uvs on those island, they will highlight on joined islands as well, preventing you from editing the shape of the first one. To avoid it, with everything selected, disable sync and change Sticky selection to Shared location. Then you can press B, select the border uvs and straighten them with W - Align Y;
- after that use W - Remove doubles with merge distance set to 0,01;
- straighten the top border and adjust uvs to match the texture;