Commercial landlords often allow commercial tenants to construct a buildout tailored to their business (e.g., retail stores, restaurants, redesigning office space, etc.)  Such tenants hire general contractors who in turn hire subcontractors and suppliers.  What lien rights do such subcontractors and suppliers have? Continue Reading Filing a Lien When the Work is Done for a Tenant Rather Than an Owner

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 quickly send out bond and lien notices if the new customer falls behind on making payments. Continue Reading 7 Ways to Manage the Credit Risk of a New Customer

Federally owned construction projects are covered by a Miller Act Payment Bond for the benefit of the subcontractors and suppliers thereof.  If you make a claim for payment under the Miller Act, you may, under certain circumstances, also have a claim for attorney fees and interest.  The text of the Miller Act is silent with respect to attorney fees and pre-judgment interest.  However, federal common law allows the recovery of both under certain circumstances. Continue Reading Increasing Your Recovery Under a Federal Payment Bond Claim

Non-competes are governed by different rules from other contracts.  Courts limit non-competes to certain circumstances, such as when an individual has received confidential information, goodwill, or specialized training; even then, the restrictions on competition must be “reasonable.”  However, when it comes to determining the applicability of the Federal Arbitration Act, the United States Supreme Court recently held non-competes should be treated the same as any other contract Continue Reading The Supreme Court Blesses Arbitration Clauses in Covenants Not to Compete, But is Arbitrating a Non-Compete Always a Good Idea?

A recent article in the Wall Street Journal discussed the rise in litigation regarding covenants not to compete, along with a summary of the positives and negatives of these covenants.  For good or bad, a covenant not to compete is enforceable in Texas if it is ancillary to, or part of, an otherwise enforceable agreement at the time the agreement is made, but only to the extent that the covenant contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other protectable interests of the employer. Continue Reading 10 Drafting Tips for Covenants Not to Compete

Construction legislation in the 2013 session was much different from 2011.  In 2011 many new construction related laws were passed including governance of indemnities and mechanic’s liens.  In 2013 many significant construction related bills were considered, but relatively few passed.  Nevertheless, the few that did get signed into law are worthy of review. Continue Reading Legislative Update

Bankruptcy preference claims are always an unpleasant surprise. They are frustrating and, in many circumstances, are unjust because they allow a bankruptcy trustee or the debtor to clawback money you received in exchange for providing valuable labor, services, or products. Continue Reading Contractors and Suppliers’ Defenses to Bankruptcy Preference Claims

Bankruptcy court is often the “court of bad news” for creditors.  In particular, subcontractors and suppliers face unique challenges when a customer files for bankruptcy.  But they also have unique rights that may elevate their claims.  Failing to act quickly and correctly on those rights can have significant consequences.  Continue Reading Weathering the Storm of an Owner or General Contractor Bankruptcy

Previously, Texas law provided that a court “may” award costs and reasonable attorney fees in a suit to foreclose a lien, enforce a payment bond claim or declare a lien to be invalid to the extent that such costs and reasonable attorney fees were “equitable and just”.  The use of the word “may” allowed courts discretion over whether to award a lien claimant his or her attorney fees.  This led to unfair results.  Even lien claimants who prevailed did not always receive their attorney fees and/or costs. Continue Reading Collecting Attorney Fees for Lien and Bond Claims