TX STATETexas Supreme Court
2005

Flores v. Millennium Interests, Ltd.

185 S.W.3d 427Texas Supreme Court • Decided 2005Enforced
FLAGSHIPLiquidated DamagesRetentionCited 105 times

HOLDING

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 FINDINGS

Liquidated Damages

Timely submission of accounting statements protects you even if some details are incomplete—don't assume minor omissions trigger automatic penalties

Retention

Courts look at whether you made a good faith effort to comply, not whether every single required item was perfect

FULL COURT OPINION