Staff Industries, Inc. v. Hallmark Contracting, Inc.
846 S.W.2d 542 | Texas Court of Appeals, 13th District | 1993
What This Case Means for Subcontractors
Staff Industries, a subcontractor, supplied over a million square feet of Hypalon material to a fish hatchery project and billed $598,001.11. Hallmark Contracting paid only $498,496.66 and withheld $99,504.45 as retainage, claiming Staff should only be paid for material actually used, not delivered. The Texas Court of Appeals ruled that when a unit-price contract is unclear about whether payment is for materials delivered or materials incorporated into the work, the parties' actual intent becomes a factual question that must be decided case-by-case.
Key Takeaways
- •Get crystal clear in your contract whether you're paid for materials delivered to the job site or only materials actually incorporated into the finished work—ambiguous contracts will be decided against you in court
- •Document everything about waste and excess materials; if your contract says 'materials furnished,' you may have a claim for delivered materials even if some becomes waste
- •Retainage disputes over unit-price contracts can hinge on contract language interpretation, so use precise wording like 'payment for all materials delivered' or 'payment only for materials incorporated' rather than vague terms
Payment shall be for the actual amount of such work done and material furnished.
Frequently Asked Question
Do I get paid for all the material I deliver to the job site, or only what actually gets used in the project?
It depends on what your contract says. If your contract is unclear, a court will look at what both parties intended. To protect yourself, write your contract to specifically state whether payment is for 'materials delivered to the job site' or 'materials incorporated into the work.' Don't leave it ambiguous.
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