TWB Architects, Inc. v. The Braxton, LLC
578 S.W.3d 879 | Tennessee Supreme Court | 2019
What This Case Means for Subcontractors
An architect firm designed a condo project but wasn't paid. Instead of cash, the architect agreed to accept a condo unit as payment. When the developer couldn't deliver the unit (it was pledged as loan collateral), the architect filed a mechanic's lien for the original design fee. The Tennessee Supreme Court ruled that a jury must decide whether the parties actually intended to replace the original contract with the new condo agreement. This means the case goes back to trial—summary judgment was improper.
Key Takeaways
- •When you agree to accept something other than cash as payment (like property or equity), document that agreement clearly in writing to avoid disputes about whether the original contract still applies.
- •A verbal or informal agreement to substitute payment methods may not automatically cancel your right to file a lien for the original fee—courts will look at what both parties actually intended.
- •If a client offers alternative payment instead of cash, get written confirmation that this replaces (not supplements) your original contract, or you may end up fighting in court to enforce either agreement.
Disputed questions of material fact exist about whether the architect firm and the development company intended a novation.
Frequently Asked Question
If a client offers me property instead of payment, does that cancel my right to file a mechanic's lien for the original fee?
Not automatically. Courts will examine whether both parties actually intended the new agreement to replace the original contract. Without clear written evidence of that intent, you may still have lien rights for the unpaid fee. Always get a written agreement signed by the client if you're accepting alternative payment, and specify whether it replaces or supplements the original contract.
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