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The Texas Supreme Court recently clarified the standards for enforcing liquidated damage provisions.  As these types of provisions are prevalent in design and construction contracts, the Court’s opinion has particular resonance in the construction industry. In Atrium Medical Center, LP v. Houston Red C, LLC, the Court held that liquidated damage provisions, to be enforceable, must be “facially reasonable” and must not create an “unbridgeable discrepancy” between actual and liquidated damages.  The Court also clarified which party bears the burden of proving facial reasonableness an

Lien rights of architects and engineers are not widely publicized and are often forgotten or purposefully not asserted. Some designers do not know they have such rights and others are concerned that asserting them may lead an owner or developer to assert claims for design errors and omissions.  Since the bulk of a designer’s work is typically completed before construction begins, a construction contractor may not even know that the designer has asserted lien rights.  Such knowledge might provide an early clue about the owner’s or developer’s payment habits and telegraph to the contract

What is a design professional’s legal responsibility for an enhancement to her original design?  What if the enhancement is necessitated by a design error and omission?  Welcome to world of betterment, not necessarily a better world, but almost certainly a bettered one. What is betterment?  If you are looking for a Texas court or statute to define “betterment”, you will have a long and frustrating search.  While there are cases that reference jury instructions about betterment and there are Texas statutes that discuss “improvements”, there is no definitive case-law or statutory d

Bankruptcy or even the threat of it, whether of an owner, contractor, or supplier, can have significant repercussions on a construction project.  At the whiff of insolvency, an owner may terminate the contract and take an assignment of subcontracts.  Mechanic’s liens and payment disputes become more complex and potentially uncollectible.  Insurer’s payment of third-party claims may require court oversight.  Understanding these impacts may allow you to prepare a shelter before the bankruptcy storm hits. 1.    Assignment of Subcontracts Many contracts, particularly those modeled after

Unforeseen site conditions can entirely disrupt an ongoing project or prevent it from it getting off the ground in the first place. Apart from the time impacts unforeseen site conditions can wreak on a project, they also can wind up costing owners and contractors substantial amounts of money.  Much of Texas’s case law interpreting unforeseen site condition provisions derive from the seminal Texas Supreme Court case of Lonergan v. San Antonio Loan and Trust Company. In Lonergan, the contractor constructed a building according to plans and specifications developed by an owner-retained archite