The general prohibition against waiving lien rights under Chapter 53 of the Texas Property Code has been written about extensively, and is well known throughout the industry. However, the Construction Trust Fund Act (Ch. 162 of the Texas Property Code) does not contain any such prohibition. From the Act itself, it is not clear whether
COVID-19 is now interrupting and, in some instances, cancelling contracts across the country. While the situation is highly fluid, these business disruptions appear likely to continue and perhaps even worsen in the immediate future. This will significantly affect and perhaps threaten businesses people have worked had to establish. And it will of course impact employees
Co-author: Trevor Lawhorn
Published in Build Houston Magazine
When non-payment occurs, suppliers and service providers often first seek relief by suing for breach of contract. Unfortunately, many companies are undercapitalized or otherwise “judgment proof.” A personal guaranty might mitigate this risk by providing an additional target, but guarantees are often difficult to obtain. Even if one is signed, the guarantors may lack assets, perhaps deliberately so. Judgement proof debtors and guarantors are especially frustrating when the case involves misappropriations of construction project funds or wrongful transfers of assets. Texas law provides at least two statutory tort claims in these circumstances: the Texas Uniform Fraudulent Transfer Act (TUFTA) and the Texas Construction Trust Funds Act (the Trust Fund Statute).
Construction lawyers routinely deal with delay claims. I have presented or defended more of them than I can remember. That is why I was curious when, earlier this year, I received a series of email invitations to presentations on the use of “concurrent delay” as a defense to contractor or owner claims for delay damages on construction projects. I’ve written about the subject in the past and wondered what, if anything, had changed.
Co-authors: Russell Jumper and Tim Fandrey
Hurricane Harvey caused severe destruction in Texas with its significant winds and historic rainfall. But Harvey may also prove to be a costly lesson for many project owners and contractors. As Texas begins to focus on recovery in the coming weeks, Harvey will further serve as a reminder to all construction industry stakeholders that hurricanes, and other “acts of God”, are risks that must be effectively managed during the pre-construction and construction phases of every project. While it is difficult to effectively avoid the risks attendant to a highly-destructive, low probability event that occurs on short notice, owners and contractors have two primary tools at their disposal to mitigate the effects of such an event: (i) contractual force majeure provisions; and (ii) builder’s risk insurance.
I was reviewing various articles I have written over the years and came across a prior version of this one about differing site conditions, written nearly twenty years ago. I was curious – does this cup still hold water?
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 have different authors, which means typically no two clauses are ever drafted the same.
This is particularly important when it comes to “No Damage For Delay” Clauses as the actual breadth of the language and scope will set the tone for their enforcement or circumvention. There are several common law exceptions to “No Damage for Delay” clauses recognized in Texas, which may be neutralized or ignored by the particular language of a “No Damage for Delay” Clause.
Texas law imposes certain implied warranties on the sale of goods, regardless of whether the warranties are mentioned in the contract. In particular, Texas law creates the warranty of “merchantability” and the warranty that the goods are “fit for a particular purpose.”
Indemnifying someone for their own negligence is a tough pill to swallow. Yet, such clauses, often referred to as “broad form indemnities”, have been common for many years in Texas construction contracts.
Because of time constraints and the desire to get the business, subcontractors and suppliers routinely sign lengthy subcontracts and master service agreements without closely reading the terms and conditions. Below are some clauses that every subcontractor and supplier should review in a contract.