Lafarge Corp. v. Wolff, Inc.
977 S.W.2d 181 | Texas Court of Appeals, 3rd District (Austin) | 1998
What This Case Means for Subcontractors
Wolff, a clay mining subcontractor, sued Lafarge for breach after Lafarge sold its cement plant and stopped ordering clay. The contract had a clause saying Lafarge didn't have to keep the plant running, but the court ruled this didn't allow Lafarge to simply walk away from the deal. The jury found the contract should survive the sale, and the court ordered a new trial to recalculate damages fairly, accounting for costs Wolff avoided after the work stopped.
Key Takeaways
- •A contract clause allowing the owner to stop operations doesn't automatically let them terminate the entire subcontract—courts will look at what both parties actually intended.
- •When you sell a business or facility, existing subcontracts may survive the sale and bind the new owner; don't assume a change in ownership ends your obligations.
- •Damages must account for costs you avoided after termination (like equipment, labor, and materials you didn't have to pay for), not just lost revenue.
We reverse the judgment and remand the cause to the trial court for a new trial.
Frequently Asked Question
If my customer sells their business, can they cancel my subcontract using a 'no operation' clause?
Not automatically. Courts look at what both parties actually intended the contract to do. A clause saying the owner doesn't have to keep operating doesn't give them a free pass to terminate the whole deal. The contract may survive the sale and bind the new owner, and you could recover damages for breach.
Related Cases
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.
Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp.
Summary judgment for defendants was properly granted because Flameout failed to satisfy the statute of frauds for an alleged three-year contract, as the three documents cited did not constitute a signed, enforceable written agreement for the sale of goods.