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
Adding Another Target: Personal Guaranties
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
Prompt Pay Acts: Preventing Slow Paying
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.
The Texas Private Prompt Pay Act requires the owner to
The Texas Construction Trust Fund Act, AKA “Plan B”
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
Rights and Remedies to Help Subcontractors and Suppliers Collect Payment
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