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Texas Construction Law Blog For Subcontractors & Suppliers

Category Archives: Collection

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How to Circumvent “No Damages for Delay” Clauses

Posted in Collection, Construction Contracts, Delay Damages, Uncategorized

Most commercial construction contracts contain a “No Damage For Delay” Clause and most contractors mistakenly believe they are Kings X for any potential claims related to delay caused by an owner or original contractor. While nearly every commercial construction contract contains the same or similar provisions, it is important to keep in mind they all… Continue Reading

7 Ways to Manage the Credit Risk of a New Customer

Posted in Collection

Get the project information up front You should ask your customer for the owner’s name and address, the location of the project, a copy of the payment bond (if any), and the general contractor’s name and address (if you are a second tier subcontractor or supplier).  Having this information at the outset will help you… Continue Reading

Your Last Resort: The Unpaid Account

Posted in Collection

A suit on an unpaid account against your customer will likely entitle you to the principal balance plus interest and attorney fees.  But a suit on an unpaid account is only as good as your customer’s ability to satisfy the judgment.  A claim on an account against an entity provides very little leverage.  The principals may… Continue Reading

Adding Another Target: Personal Guaranties

Posted in Collection

In general, a personal guaranty makes an individual or individuals liable for an entity’s debts or obligations.  A personal guaranty which guarantees a general contractor’s obligations to pay a subcontractor is rarely given, but it is common for the principal(s) of a subcontractor with unestablished credit to personally guarantee the debts and obligations of the… Continue Reading

Prompt Pay Acts: Preventing Slow Paying

Posted in Collection

Prompt Pay Acts deter late payment by general contractors (and owners) by giving subcontractors and suppliers rights in the event the general contractor does not timely pay.  These rights generally include interest, attorney fees, and the right to suspend performance.  Texas Private Prompt Pay Act The Texas Private Prompt Pay Act requires the owner to… Continue Reading

The Texas Construction Trust Fund Act, AKA “Plan B”

Posted in Collection

The Construction Trust Fund Act is often “Plan B” for subcontractors and suppliers who have not perfected their lien or bond claim.  The Construction Trust Fund Act provides for civil and criminal penalties to those who misappropriate construction trust funds and fail to pay for labor and materials.  When a general contractor or upstream contractor… Continue Reading

Rights and Remedies to Help Subcontractors and Suppliers Collect Payment

Posted in Bonds, Collection, Liens

Nonpayment is the biggest threat to most subcontractors’ and suppliers’ bottom lines.  Nonpayment frequently occurs in the construction and oil and gas industries because most goods and services are sold on credit.  C.O.D. sales are uncommon and payment upfront is almost unheard of.  Because of this practice, nonpayment is one of the most common legal… Continue Reading