Chilton Insurance Co. v. Pate & Pate Enterprises, Inc.
930 S.W.2d 877 | Texas Court of Appeals, 4th District (San Antonio) | 1996
What This Case Means for Subcontractors
A general contractor (Pate & Pate) hired subcontractor Caliber on a public works project in San Antonio. When Caliber breached the contract, Pate admitted in court that it owed Caliber a specific credit amount for work completed, but then claimed the breach excused it from paying. The Texas Court of Appeals ruled that by continuing to treat the contract as valid after the breach, Pate waived its right to use the breach as an excuse to avoid payment. Caliber won the right to collect the judicially admitted credit amount.
Key Takeaways
- •If a general contractor admits in court that it owes you money for work performed, it cannot later use your breach as an excuse to withhold that payment if it kept the contract active
- •Document all admissions of payment obligations in writing and get them on the record early—they become powerful legal evidence
- •Continuing to work or treat a contract as ongoing after a dispute weakens the other party's ability to claim breach excuses non-payment
Treating contract as continuing deprives non-breaching party of excuse for non-performance.
Frequently Asked Question
If my general contractor admits in court that they owe me money, can they still refuse to pay by claiming I breached the contract?
No. Once a general contractor judicially admits owing you a specific amount and continues treating the contract as valid, they lose the right to use your breach as an excuse for non-payment. The admission locks them in. Make sure any admissions are documented and get them on the record as early as possible.
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