Principal Attorney
In the fast-paced world of construction, contracts are critical to keeping projects on track and managing expectations between owners, contractors, subcontractors, and suppliers. But when one party fails to uphold their end of the agreement, it can lead to costly delays, disputes, and even project failure. Understanding the legal remedies available in Texas for breaches of construction contracts can help you respond strategically and protect your bottom line.
At Sul Lee Law Firm, we guide Texas businesses through contract enforcement and dispute resolution in the construction industry. Whether you’re seeking to enforce your rights or defend against a breach claim, we’re here to help.
Common Types of Breaches in Construction Contracts
Construction contracts can be breached in a variety of ways. Some of the most common include:
- Failure to complete work on time
- Nonpayment for services or materials
- Defective workmanship or substandard materials
- Unauthorized changes to the scope of work
- Failure to follow project specifications or regulations
Breaches can be either material or minor. A material breach is a serious failure that defeats the purpose of the contract, while a minor breach may still allow the contract to move forward. The nature of the breach impacts the remedies available.
Review the Contract Terms
Before taking legal action, it’s essential to review the construction contract carefully. Many agreements include clauses about:
- Notice and cure periods
- Dispute resolution methods (e.g., mediation, arbitration)
- Limitations on damages
- Termination rights
- Liquidated damages provisions
These terms can significantly affect your options and obligations in the event of a breach. An attorney can help interpret the language and determine how best to proceed.
Legal Remedies Available in Texas
If a breach has occurred, Texas law offers several potential remedies. The correct course of action depends on the type of breach, the losses incurred, and the contract terms.
Compensatory Damages
This is the most common remedy. The goal is to compensate the injured party for the losses they suffered because of the breach. For example, if a contractor abandons a job midway through, the owner may recover the extra costs needed to complete the work with another builder.
Consequential Damages
Also known as “special damages,” these are losses that result indirectly from the breach but were foreseeable at the time of contracting. For example, if a construction delay causes an owner to lose rental income, that income loss may be recoverable if properly documented and anticipated.
Keep in mind that many construction contracts exclude consequential damages, so it’s important to review your agreement carefully.
Liquidated Damages
Some contracts contain a liquidated damages clause, which sets a specific dollar amount the breaching party must pay for each day of delay or for other types of non-performance. These are enforceable in Texas so long as the amount is a reasonable estimate of the harm and not considered a penalty.
Specific Performance
In some instances, a court may order the breaching party to fulfill their obligations under the contract, especially when money damages aren’t sufficient to remedy the harm. While not common in construction cases, this remedy may be sought in unique circumstances, such as where a particular contractor’s skill or material is irreplaceable.
Termination and Rescission
If the breach is material, the non-breaching party may have the right to terminate the contract altogether and walk away from further obligations. Termination should follow the procedure outlined in the contract to avoid claims of wrongful termination.
In some cases, the court may rescind the contract, effectively canceling it and attempting to return both parties to their original positions.
Mechanic’s Liens
If you’re a contractor or subcontractor who hasn’t been paid, you may be able to file a mechanic’s lien on the property. This provides a legal claim to the property until payment is resolved. Mechanic’s liens are powerful tools in Texas, but must be filed with strict adherence to statutory deadlines and notice requirements.
Steps to Take When a Breach Occurs
When you suspect a breach in a construction contract, timing and documentation are key. Here’s what to do:
- Document everything: Save emails, invoices, progress photos, schedules, and communications.
- Notify the other party in writing: If your contract requires notice, provide clear written notice of the issue and an opportunity to cure the breach, if applicable.
- Mitigate damages: Take reasonable steps to limit the losses you suffer.
- Consult with legal counsel: An attorney can help you evaluate your remedies and determine the best course of action.
How Sul Lee Law Firm Can Help
Construction disputes are complex and often involve multiple parties, conflicting interpretations of contract terms, and technical evidence. Whether you’re a contractor, developer, or business owner, you need a legal team that understands both the legal and practical realities of construction work in Texas.
At Sul Lee Law Firm, we help clients enforce their rights, recover damages, and defend against breach claims. Our goal is always to resolve disputes efficiently—whether through negotiation, arbitration, or litigation—so you can focus on moving your business forward. Contact us today for a confidential consultation.