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What amount should I put for "Total Contract Amount" on the TX preliminary notice as a Material Supplier?

TexasConstruction ContractPreliminary Notice

We are working on a commercial project as a material supplier in Texas. We're trying to send a Preliminary Notice of Specially Fabricated Materials and see that "Total Contract Amount" is required by TX to be on this document. However, we have an open ended contract and do not know what the total contract amount will be. What amount should we put here? We do know the value of the first shipments.

1 reply

Oct 28, 2019
In order to best preserve the right to file a lien for specially fabricated materials, a Notice of Specially Fabricated Materials should be sent. That requirement comes from § 53-058 of the Texas Property Code, which also sets out the information that should be included in the notice. Under § 53-058(c)(2), a Notice of Specially Fabricated materials states that the notice must include "the price of the order" - but, it doesn't provide any guidance for a situation where materials will be specially fabricated on an open account under one contract.

Sending a Notice of Specially Fabricated Materials when working under open contract and multiple orders

It's important to note that the Notice of Specially Fabricated materials requirements don't tie directly to the existence of one contract. Rather, it refers to "the order" under § 53-058(a) and (c), and "an order" under subsection (f). So, when there are multiple orders on the same job, and where it's unknown what the amount of the overall contract will be from the start - it would seem that a prospective lien claimant could send multiple notices, if they so chose.  Plus, there's little harm in sending additional notices. But, when there's one contract price for all of the materials that will be fabricated for the entire job, it's much easier to send a Notice of Specially Fabricated Materials. For more information on Texas notices: Texas Preliminary Notice Guide and FAQs.
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