Sage Street Associates disputed a 10% prejudgment interest rate awarded by a court in a construction contract dispute, claiming Texas's usury law capped it at 6%. The Texas Supreme Court ruled that the state's constitutional usury limits don't apply to interest ordered by judges—only to commercial lending agreements. This means courts have flexibility to award prejudgment interest at rates higher than the usury cap when deciding construction disputes.
Court-ordered prejudgment interest is not subject to Texas usury limits, so judges can award rates above 6% if they find it appropriate for your case
Usury protections only apply to lending transactions between parties, not to judicial remedies for breach of contract
If you're owed money from a construction contract dispute, the interest rate a judge awards won't be capped by constitutional lending restrictions