TX STATETexas Court of Appeals, 13th District
2000

Kajima International, Inc. v. Formosa Plastics Corp., USA

15 S.W.3d 289Texas Court of Appeals, 13th District • Decided 2000Remanded

HOLDING

Kajima, a construction subcontractor, sued Formosa Plastics for fraud after being promised additional compensation for overtime work that wasn't in the written contract. The trial court limited the fraud claim to only the initial contract signing, but the appeals court ruled this was wrong. The court said fraud can include false promises made after signing to get a contractor to keep working. The case was sent back for a new trial because the jury should have been allowed to consider all fraud claims, not just those about getting the contract signed.

KEY FINDINGS

Change Order

Verbal promises of extra pay for overtime or additional work can be fraud even if they're not in the written contract—document all promises in writing or email

Dispute Resolution

Don't rely on a contractor's verbal assurances to perform work beyond the contract scope without getting written change orders signed first

FULL COURT OPINION