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Best Practices for Texas Contractors Facing Employee Departures

When employees leave a job, they are far more likely to say — or at least think — that it’s not their fault. It’s the employer’s fault. Employees of construction firms leave for all kinds of reasons, especially in a job market like our competitive Texas workplace. It serves employers …

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Resolving Subcontractor Disputes with Pass-Through Claims and Liquidation Agreements

Imagine a project where you are unable to reach final completion due to an unresolved subcontractor claim. If the project owner is responsible for the claim, and both the owner and subcontractor are entrenched in their positions, how would you resolve this dispute?

The default option is a three-party lawsuit …

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Understanding the Limits of Attorney-Client Privilege

Most of us have a rough understanding of the attorney-client privilege. But did you know how easily you could lose that privilege? Or that some communications with your attorney may not be privileged at all?

The attorney-client privilege works to keep written and oral communications between an attorney and their …

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Texas Statutes Provide Leverage in Unsigned Change Order Work

It is a common occurrence for a contractor or subcontractor to encounter a situation where they are ordered to perform extra work without a signed change order. There may be the promise of a change order to come, or simply a unilateral change directive. This may or may not cite …

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Navigating the Risks to GCs when Subcontractors Misclassify Workers

Last month, we discussed the general liabilities to construction firms when employing supposed independent contractors when a proper legal analysis would find those individuals to be employees. This month, we follow up to discuss the specific risks to general contractors (GCs) that may flow from a subcontractor’s improper classification of …

Liebherr Construction Eq
Your local Liebherr Construction Eq dealer
Nueces Power Equipment
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Contractor or Employee: Understanding the Fine Line in Construction Relationships

“We don’t have any employees; all our work is done by contractors.” It’s an old trope, but if I had a dollar for every time a construction contractor said that to me, I’d have a whole lot of dollars. Contractors may recognize numerous benefits to having a workforce made up …

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Stale Bids: The Offer They Didn’t Refuse

So you’ve been awarded the contract, and you’ve lined up your subs and suppliers. But now, you and the team are in a holding pattern. Perhaps the owner hasn’t obtained the required permits or economic developments are impacting funding. Maybe you don’t have any explanation. We are seeing clients with …

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Are Pay-if-Paid Clauses Really Enforceable?

Contingent payment clauses exist in many Texas construction contracts. In 2009, the Legislature passed a bill that has become Chapter 56 of the Texas Business Commerce Code. That bill settled a long-running debate about the enforceability of “Contingent Payment” clauses. The bill was crafted through a grueling eight-session mediated dialogue …

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Delay Damages for Early Completion

Contractors are familiar with construction delays and the resulting claims. But what happens when a contractor finishes construction before the contractual deadline despite an owner-caused delay. May the contractor still collect damages for the delay? Consider the following hypothetical:

Imagine a project with NTP on January 1 and a 365-day …

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Legislative Update

The 88th Legislative Session came to an end on May 29. The issues covered in this column relate to change order work, right to repair, experience modifiers, and certificates of merit. Each of these new laws applies to contracts entered into after September 1, 2023.

House Bill 3485
Most contracts …
Your local Wirtgen America dealer
Kirby Smith Machinery
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Electronic Signatures are Beneficial, but Come with Security and Legal Risks

While the concept of signing a document electronically is nothing new, its prevalence in the construction industry is picking up speed. Industry leaders (and those who wish to become leaders one day) must educate themselves on the concept of e-signatures and the implications they may have on the construction industry. …

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Payment Bonds

A payment bond guarantees payment of subcontractors, laborers, and suppliers on a project. Payment bonds are required on public projects for prime contracts (the contract between the general contractor and governmental entity) greater than $25,000. But they are common on private projects as well, where they not only provide payment …

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The Construction Trust Fund Act

“Robbing Peter to pay Paul,” that’s a phrase that is all too common in the construction industry. If a contractor or subcontractor gets behind financially, they may use today’s progress payments to pay debts on another earlier project. Chapter 162 of the Texas Property Code is designed to protect Peter. …

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Waiver in Construction Contracts

No one wants to waive their rights. Contractors certainly don’t. But waiver is a common concept in contract law. Contracting parties can waive rights afforded a contract or statute. That makes waiver an important issue for both parties to a construction contract. This article will briefly cover waiver and best …

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The Legislature is Back

The 88th Regular Session of the Texas Legislature commenced on January 10, 2023. The Legislature has 140 days from that date to address the business of the State of Texas. Constitutionally speaking, the only requirement of the Legislature when it meets in regular session is that they have to pass …

Your local ASV dealer
CLM Equipment Co
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Complying With Contract Requirements

We live in a world of contracts. Long, complex contracts to be sure. But living in a world of contracts has enormous benefits.

Consider your doctor’s situation. If there is a dispute regarding the quality of services, it will be handled under the law of negligence. After all, the patient …

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Best Practices for Implementing the New Buy America Requirements

For years, infrastructure contractors have dealt with Buy America legislation that required products used on certain projects to contain a designated percentage of iron and steel produced within the United States. Historically, this legislation differed from “Buy American” legislation in that it only applied to iron and steel and did …

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Sovereign Immunity Waivers for Contractors

When it comes to the laws and regulations surrounding construction, all states differ to a certain extent. For contractors in Texas, an important difference is Sovereign Immunity. This means that in Texas – Governmental entities may be immune from claims, suits, or damages arising from a contract.

The law is …

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Prompt Payment Required by the Texas Law on Public Projects

Under Chapter 2251 of the Texas Government Code, Public contractors enjoy the protections of statutory requirements for prompt payment similar to those provided by the Texas Property Code for contractors on private projects as discussed in last month’s edition. Chapter 2251 recognizes that contractors performing work for governmental entities expect …

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Prompt Payment Required by the Texas Law on Private Projects

Payment for work performed is important to every contractor at every tier. Receiving payment in a timely manner is equally important. Texas law recognizes this and provides contractors a remedy for untimely payment in the form of interest and the right to suspend performance. The Prompt Pay Act in Chapter …

Your local Wirtgen America dealer
Kirby Smith Machinery
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OSHA Aims to Create National Heat Injury and Illness Standard

Hot news (pun intended) these days is OSHA’s intent to issue a national standard laying out employer obligations to protect employees against heat injury and illness. This responds to the Bureau of Labor Statistics reporting of 344 work-related deaths in U.S. due to environmental heat exposure between 2011 and 2019. …

Supply Chain Impacts

War, inflation, pandemic, and staffing shortages – just a few of the events causing fragility in our supply chains. Texas contractors are asked to absorb these shocks all while maintaining project budgets and schedules. As with most problems on construction projects, answers are complex, but may be found in the …

Mediation of Construction Disputes: How to Prepare for a Successful Resolution

In a recent column, my partner Jerry Negrete wrote about dispute resolution provisions that frequently appear in construction contracts. In her column, Jerry briefly addresses mediation, arbitration, and litigation. Building on that introduction, this column will focus on mediation as a process and provide suggestions and recommendations that may assist …

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Contractual Dispute Resolution Provisions: A Primer

Contracts often include a section titled ‘Dispute Resolution’ that lists terms such as ‘mediation,’ ‘litigation,’ or ‘arbitration.’ While contractors may have heard these terms before, it is my experience that most contractors are not comfortable defining each term, nor do they fully understand how each form of dispute resolution can …