Flores v. Millennium Interests, Ltd.
185 S.W.3d 427 | Texas Supreme Court | 2005
What This Case Means for Subcontractors
A Texas court ruled that a seller under a contract for deed (executory contract) who sends a timely annual accounting statement to the buyer is not automatically liable for $250/day liquidated damages just because the statement is missing some required information. The court held that liquidated damages only apply if the statement is so deficient it's not a good faith attempt to inform the buyer. This matters to construction subcontractors because many work under contracts with similar payment accounting and liquidated damages clauses—minor omissions won't automatically trigger penalties if you're making a genuine effort to comply.
Key Takeaways
- •Timely submission of accounting statements protects you even if some details are incomplete—don't assume minor omissions trigger automatic penalties
- •Courts look at whether you made a good faith effort to comply, not whether every single required item was perfect
- •Liquidated damages clauses don't require the other party to prove actual harm—but they also won't be enforced for trivial deficiencies
Liquidated damages provision is penal in nature and does not require actual harm.
Frequently Asked Question
If I submit a payment accounting or contract statement on time but miss some required details, will I automatically owe liquidated damages?
No. Courts won't enforce liquidated damages for minor omissions if your statement was timely and shows a good faith attempt to provide the required information. However, if the statement is so incomplete it's essentially useless, that's different. The key is demonstrating you tried to comply with the contract requirements.
Related Cases
Green International, Inc. v. Solis
No-damages-for-delay clauses in construction contracts need not meet the conspicuousness requirement established in Dresser for exculpatory negligence clauses, and such clauses are enforceable to bar delay damages absent specific exceptions.
Heldenfels Bros. v. City of Corpus Christi
A municipality owes no duty to a subcontractor to ensure a general contractor provides valid payment bonds, and a subcontractor cannot recover from the municipality under quantum meruit, unjust enrichment, or negligence theories when the general contractor abandons the project.
Weize Co. v. Colorado Regional Construction, Inc.
A general contractor violated Colorado's construction trust fund statute by failing to hold funds in trust for subcontractors and suppliers, and a lien release bond does not exempt contractors from trust fund obligations or excuse failure to record a lis pendens.
Luis E. Garcia, M.D. v. Copenhaver, Bell & Associates, m.d.'s, P.A., Defendant-Third Party St. Paul Fire & Marine Insurance Company, Third Party
Whether a defendant qualifies as an 'employer' under ADEA is a substantive element of the plaintiff's claim, not merely a jurisdictional question, and must be decided by a jury rather than dismissed by the judge under Rule 12(b)(1).
Intergen N v. v. Grina
A party cannot be compelled to arbitrate disputes unless it has agreed to do so; InterGen, a non-signatory to the arbitration agreements, is not bound by arbitration clauses in contracts signed by other parties.
Travis County v. Pelzel & Associates, Inc.
Local Government Code § 89.004's presentment requirement is a condition precedent to suit, not a waiver of sovereign immunity, and a county does not waive immunity by withholding contract payments under liquidated damages clauses.