TX STATETexas Court of Appeals, 13th District
1990

Sheldon L. Pollack Corp. v. Falcon Industries, Inc.

794 S.W.2d 380Texas Court of Appeals, 13th District • Decided 1990Enforced

HOLDING

A concrete subcontractor (Falcon) sued a general contractor (Pollack) for unpaid work on a hotel project in Texas. The court ruled that Falcon substantially performed its work and was entitled to recover the full contract price minus the cost to fix defects ($30,000). This case established that payment conditions in subcontracts are about timing, not about whether you have to get paid at all if you do the work.

KEY FINDINGS

Pay-When-Paid

If you substantially complete your work, you can recover full payment minus repair costs—even if the owner or GC hasn't paid yet or claims defects exist.

Retention

Payment clauses like 'pay when paid' don't eliminate your right to payment; they only delay when payment is due. You still get paid if you substantially perform.

Change Order

Document your work completion and any defects the GC claims. The cost to fix those defects will be deducted from your recovery, so dispute inflated repair estimates.

FULL COURT OPINION