Kajima International, Inc. v. Formosa Plastics Corp., USA
15 S.W.3d 289 | Texas Court of Appeals, 13th District | 2000
What This Case Means for Subcontractors
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 Takeaways
- •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
- •Don't rely on a contractor's verbal assurances to perform work beyond the contract scope without getting written change orders signed first
- •If a contractor makes false promises to keep you working, you may have a fraud claim even after the contract is signed—save all communications proving what was promised
Promise to pay for overtime work was outside the purview of the contract.
Frequently Asked Question
Can I sue for fraud if my contractor promised to pay me extra for overtime work but it wasn't in the written contract?
Yes, according to this Texas case. Fraud claims aren't limited to promises made to get you to sign the contract—they can also include false promises made afterward to get you to keep working. However, you need evidence of the promise (emails, texts, witnesses) and proof the contractor had no intention of paying when they made the promise.
Related Cases
Atlantic Marine Constr. Co. v. United States Dist. Court for Western Dist. of Tex.
Forum-selection clauses in federal contracts are enforced through §1404(a) transfer motions, not §1406(a) dismissals, and must be given controlling weight except in exceptional circumstances.
Texas Natural Resource Conservation Commission v. IT-Davy
Sovereign immunity bars a contractor's breach-of-contract suit against a state agency absent express legislative consent; neither the agency's conduct, contract terms, nor general statutes waive immunity from suit.
Martin K. Eby Construction Company, Inc. v. Dallas Area Rapid Transit
A contractor must exhaust administrative remedies established by a regional transportation authority before pursuing breach of contract claims in court, even when the authority lacks governmental immunity from suit.
Edwin P. Harrison, and United States of America, Party in Interest v. Westinghouse Savannah River Company
The Fourth Circuit reversed the district court's dismissal, holding that the False Claims Act broadly reaches false statements made to obtain government contract approval, not just false payment claims themselves.
General Services Commission v. Little-Tex Insulation Co.
The State does not waive sovereign immunity from breach-of-contract suits by accepting contract benefits; Chapter 2260's administrative procedure is the exclusive remedy for such claims.
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.