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Texas Construction Law Blog For Subcontractors & Suppliers

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 decide to walk away from the entity and set up another one.  Alternatively, they may file for bankruptcy.  If so, you will have an unsecured claim.  Unsecured creditors almost never receive the principal amount of their claim in bankruptcy.  This makes an unpaid account claim the least powerful of all claims available to a subcontractor or a supplier.

In addition to the unpaid account claim, there are quasi-contract theories, such as quantum meruit, but such claims may be difficult to prove.  In addition, the case law regarding these claims is unsettled, especially when they involvle claims arising out of the chain of contract on a construction project.