How to Get Paid on Texas Construction Projects During Coronavirus Outbreak

State

Texas

Role

All

Project Type

All

Experts in this webinar

Ben House
Ben House
6 years experience

COVID-19 is making it impossible for some Texas construction projects to continue, but you can still get paid if you navigate local laws correctly.

Join this webinar to learn:

  • Why COVID-19 is not automatically a valid contract excuse
  • Why not to depend on Force majeure
  • What next steps to take to get paid

Full Transcript

Seth:
Hello everyone and thank you for joining us today. Uh, I’m Seth Bloom here at Levelset. I’m the Senior Director of Attorney Services, uh, and do a lot of work with the expert center here. I’m really excited today to have, uh, an excellent lawyer from the Houston, Texas area. Uh, and he is Ben House from House Perron & House PLLC. Um, and he is primarily does, uh, construction law, although his firm does do some civil litigation in general, but he is a construction law guy. So without further ado, I want to turn it over to Ben. Uh, he’s got a great, great presentation for us today and we’re excited to have him.

Ben:
Thank you Seth. Um, hi everybody. My name is Ben house. Like Seth said, uh, my firm’s house Perron house. I practice on the West side of Houston, also known as Katy area. Uh, although Houston got so big that it actually ate Katy. So we’re, we’re surrounded again. So, um, I wanted to, uh, based on what’s occurring in the country right now with COVID, uh, there is so much confusion, consternation, worry about what, about how the constructors contracts are affected. What, how your duties are affected. And that goes one of two ways. And, um, before I get into that, uh, I’ll tell you a little bit about myself. Uh, I’m a partner in my firm. I handle, uh, all of the construction litigation at the firm. I am a litigator. We go to trial, uh, at least we used to before COVID shut our jury trials down.

Ben:
Um, it’s not looking like we’re going to have a jury trial for a little bit here, uh, because the, uh, the courts and government, uh, understandably want to be very safe. But, um, I’m a construction lawyer. Uh, I’m a Texas Aggie. I have a construction science degree from Texas A & M. so I’m construction all the way back from the beginning. So the purpose, why are we here? All right. I’m not going to educate you on the law. I’m not going to talk to you about, uh, legal cases. Uh, I’m not gonna cite Supreme court precedent to you. I’m going to tell you what you need to know. I’m going to tell you generally rule of thumb, how things work. Um, I’m going, uh, as specific as I’m going to get, is talking to you maybe about specific terms and some AIA contracts and some consensus docs, contracts and some federal contracts. So if you’re one of those contractors who uses one of those documents, uh, stay tuned. Uh, the other thing I’m going to talk about is, and I think this topic is not discussed as often as it should be.

Ben:
What if your contract isn’t that sophisticated? A lot of my clients are subcontractors. They don’t have the big, high dollar sophisticated, uh, that that often happens between owner and general contractor. Multimillion dollar contracts that, that I’m asked to consult on and litigate on are routinely very, very simple, uh, sometimes poorly drafted, sometimes creatively drafted. Uh, but I want to talk a little bit about what the law has to say, uh, in that situation. So now we’re done with that. Let’s get started. And I’m going to throw this presentation up to assist folks. Okay. How to unlock payment when construction is blocked and that you’re going to figure it out. That means something a little different. All right, there’s me. Hi, uh, major takeaways. COVID 19 is not an automatic excuse to get out of a contract. I wrote that because it’s not an automatic excuse to get out of a contract.

Ben:
Contracts, uh, may very well continue, uh, especially in areas where, uh, construction contracting is not a subject to stay at home orders, which is most areas in Texas that I have seen. So if COVID, uh, if no law says you cannot build no matter what, then you have to then think about, okay, what does the law say about epidemic circumstances and what does, what does my contract have to say about this? It’s pretty straight forward, but let’s figure that out. Then I’m going to talk about force majeure language, uh, to get the benefit of that language. You’re going to figure out, you have to have it. And a lot of people seem to think when they have a force majeure clause, boy, they’re covered and they’re in great shape. I got a force majeure clause. You, you, you want to be, I’m, I’m totally off the hook or I can have as much time as I want.

Ben:
Nope. We’ll talk about that. Uh, last thing I want to talk about is dangerous phone calls. What you say can be used against you. That’s uh, that’s kind of a lawyer joke. But in reality you do have to be very careful about what you say you can and cannot accomplish and will and will not do under COVID circumstances because of the can actually happen. It can cause you to breach your contract without you even knowing it. Let’s talk about that a little bit. All right? Excuses go two ways. Ben, what’s your point? A builder needs to know which hold water in which dumps. So all I’m getting at here is that as a contractor, if you’re a subcontractor, you have folks trying to get out of that, might be trying to get out of their contracts under you or telling you they can’t perform their contracts under you or need more time. And then you yourself might be telling either because of your sub subcontractor or because of things going on in your own operation. Hey, a general contractor, I need more time or I’m not going to be able to do this at all. So both of those can, can happen under the very unpredictable COVID. You never know which companies are up and running and which aren’t. So that’s my general, that’s, that’s how we’re going to approach this today. All right. Normal rule. No excuses. Common law rule is normally a party who contracts to do something that was possible to perform when the contract was made, will be held to that performance. Even though it is, it subsequently becomes more difficult or impossible to perform the regular rule. Ladies and gentlemen, is that if it could have been done when you started the contract, the party who contracted to do the work bears the risk of not being able to do the work. Uh, it’s a harsh rule. It’s a scary rule. It doesn’t seem very reasonable, but it is actually the law. So if that’s the law, how do you, how do you protect yourself? How do you get around it? How do you make sure, uh, how do you either hold people to this or protect yourself from it? Alright.

Ben:
The impossibility defense: this is also, this is not language that’s going to be in contracts. Uh, this is the law. This is actually the common law and these are common law defenses. What does common law mean? Common law means that this is baked into the law. This is built in, uh, you don’t, this unlike a force majeure clause or a no damage for delay clause or a pay if paid, paid when paid clause. These are in the law. So these don’t need to be written anywhere. Okay. And these are, there’s, there’s three general names for this impossibility defense. Those are right there in front of you and possibility of performance, commercial and practicability. That’s different from impossibility and frustration of purpose by the current summit event. The non-occurrence of which was a basic assumption on which the contract was made. So the whole reason we got into this contract has been destroyed.

Ben:
Now, if you’re building a commercial structure, and let me, let me get back to work and I can see somebody here. If you’re building a commercial structure, the purpose of building that structure to have a bank, to, to have a store, whatever that purpose is, may or may not have been destroyed based on what you’re actually trying to build. So you see, that’s just because COVID exists doesn’t mean that the entire purpose of building the thing you meant to build in the first place doesn’t exist anymore. In fact, I would argue that usually it does. So this, while it may be possible to utilize this under circumstances where the owner and, and uh, where the, for the owner basically where he says, look, there’s, there’s no point in doing this anymore. I’m going to cut you out. Um, the general contractor or, and therefore the subcontractors might be in a position of saying, Oh no, uh, this, this is not good except, let’s go back to screen here.

Ben:
It’s this common law idea of impossibility of performance is generally only applied under three specific circumstances. Historically in Texas, we’re talking Texas law here. That is impossibility of performance generally applied under these three circumstances, the death or incapacity of a person who is necessary for performance. Okay. In the construction context, uh, throw that out the window, almost everyone involved in construction is fungible. When you’re talking about someone necessary for the performance, you’re talking artists, musicians, people that have a skill that is not inherently fungible. You’re hiring that person for that skill. Very rarely if ever applied in construction. Number two, the destruction or deterioration of a thing that is necessary for performance. Okay, now we’re getting somewhere destruction or deterioration of something that is necessarily performance. Well, uh, that’s typically this, this is utilized in construction. It’s applicability to COVID I think is not great.

Ben:
And here’s why in construction, uh, if something happens to what you’re building and it’s not your fault if, if you know, even if a fire strikes, uh, the property or you’re working in, in a material, in a situation or an auto mechanic situation, the car is destroyed. Okay? The subject of what you’re working at for no reason, uh, for no, uh, well not caused by you is destroyed. That can release you from your contract. Now we’re in the COVID situation. We’re mostly dealing, we’re mostly saying, uh, we, you know, it’s dangerous to get folks to work. It’s dangerous to run offices, but the actual premises, the tools, the items, the things you need to build are not destroyed. So, and these three items are read in a very limited manner, such that number two’s application is, uh, undercoded creatively maybe, but, uh, uh, I’m not, I’m not expecting to see that a lot in incoming, uh, COVID litigation, which is coming number three, the big one, the important one, prevention by governmental regulation.

Ben:
Okay. This comes from a 1992 Texas Supreme court case I said i wasn’t going to do any of that and I’m not, but prevention by governmental regulation is read stricter than you might think. So in that case, the idea was a new law, uh, which we’ll talk about a little bit later. A new law came into effect and basically made the premise of the contract. They agreed to impossible. Like, ah, you’re building a coal fired power plant. And, uh, this is not the facts of that case. And, uh, they pass a law saying you can’t build coal fired power plants. Okay, well then under Texas law, alright, we’re obviously talking about a situation that, that can release a contract. All right, let’s scoot over second, talk about COVID. COVID 19 comes up.

Ben:
As a result of covid, we have seen a bunch of orders. The Texas Supreme court has issued orders. The, uh, individual counties have issue orders. Uh, yesterday, uh, judge Lina Hidalgo issued an order that everyone has to wear mask in Harris County. Um, the, these are major orders, uh, stay at home orders being huge, uh, for, uh, and then you have a central businesses mixed with stay at home. You have the danger of operating those businesses. So prevention by governmental regulation, you see the obvious issue here. Does the regulation, if construction is in your area and a central practice, has the government regulation actually stopped us effectively from operating, even though it says we’re essential? So you’re an owner of a construction company or subcontract. You don’t want to endanger, uh, your folks. Nobody does their employees. Uh, but you’re in a central practice, you, you, you are authorized by the government of the state of Texas to do your work, your necessary, your essential.

Ben:
Alright, well does the, does the government, does regulation, is the stay at home orders of the government actually really in reality prevent you from doing your work? And I think the argument there, uh, there’s no case on point on this. There are no cases on point on COVID yet, but I think your argument is, is very strong there that yes, uh, prevention by governmental regulation, uh, especially in a post COVID light where you’re dealing with juries and judges, uh, that all lived through COVID themselves. Uh, and the law is on the books saying, Hey, this, this contract was made impossible effectively by governmental regulation. I think you’re going to see a warm reception to that. I really do. Um, this is just my one lawyer’s opinion, but I think that’s coming.

Seth:
I just wanted to inject something, having practiced, um, I mean, having practiced law in new Orleans for many, many years, this reminds me of, uh, after Katrina.

Ben:
Yes. The Katrina excuse for not showing up to court or missing deadlines had, uh, you know, lasted for years, but I guess it’s only effective within the courtroom for about six months. So right now I just wanted to give that perspective that sometimes after these crisis, you know, people do try to take advantage of them. They do. They do. Um, I’m seeing lots of reports of lots of really, uh, major companies get a lot of government money. Um, good for them. I guess let’s neither here nor there for us, but, uh, I, this brings up a critical point, um, that I should have put in this deck, but I didn’t, and that’s this, uh, I’m getting this question a lot in my daily practice. While the courts are not, uh, the courts are technically open. Uh, we’re not having jury trials. We are having hearings.

Ben:
I’m having zoom hearings all the time. Um, I’m having zoom depositions, uh, for the very first time. A court-I was in a hearing when this morning, uh, the judge told us he had his first, uh, zoom bench trial, a bench trial when there was no jury. So every, they tried evidence, they put a case on in front of the judge on zoom in Harris County, Texas. Okay. I think we’re going to see a lot more of that. So the question I get a lot from contractors is, Hey, COVID is happening. Delays are happening. My general contractor says, Hey, you know, you’re, you’re okay, the delays. All right. Owner’s saying delays. Okay. Delays. Okay. But in the meantime, here’s the deal. Payment isn’t occurring. A Texas law has extremely strict lien rights. Part of the existence of levels companies like level set and Levelset itself is to help you protect those lien rights.

Ben:
Okay? That lien law has not stopped because of COVID. It has not been frozen because of COVID. If those lien deadlines, which are dropped dead critical in Texas to protect your lien rights as a subcontractor, general contractor, you can kind of get away with murder, a subcontractors, sub sub contractors, second tier contractors, you, your lien right, ignore any, anything, any general contractor says, ignore anything any owner says about getting your liens on file and getting your notice letters out. You, the, the requirements of Texas law have not changed. It is just as critical that you are just as timely about those letters. Now I would recommend, you know, you know, greasing the skids there a little bit with those folks. Say, look, Hey, owner general contractor, I gotta send these things. It’s a have to. I don’t have a choice, uh, to protect our rights.

Ben:
I just, I hope you understand. You know, I just have to do this. Uh, I do absolutely recommend doing that because nobody gets likes to get a lien letter in the middle of COVID and that can really harm construction situations. But if you handle it right, it’s okay. Uh, and let me tell you, if you feel like you’re a, if you’re a subcontractor who, who feels like no other subcontractors are exercising their lien rights, you’d be incorrect. So you need to be the squeaky wheel gets the oil. You need to be, uh, on top of your rights as always. But especially now when a lot of people are being lulled into a false sense of everything’s going to be okay kind of situation. Okay, let’s go back to, uh, force majeure. Alright. I have put, I’ve put a sample force majeure paragraph here. Um, you can take the time to read it. I’m not going to read it to you because it doesn’t really matter. Why does it really not matter? Because yours isn’t gonna read like this. Force majeure clauses are not the same across the board. Um, force majeure clauses are actually almost always different from one another. So, uh, what I want to talk about instead is how they work in what they do. Okay? First things first. Uh, you have to actually have a force majeure clause. Okay? They’re not ubiquitous. They’re not always in contracts. Uh, sometimes they are, sometimes they’re not. Um, but if you don’t have one, this the, Oh, and here’s the critical part. They’re not always called force majeure. Uh, force majeure means, uh, uh, it’s, it’s a French phrase, meaning basically stronger than,. And so force majeure means it, uh, that’s your act of God.

Ben:
Clause is, excuse me, usually in your, your force majeure paragraphs as are a number of other kind of excuses listed there. So, uh, if you, if you have one, this is how you’re going to analyze it. Okay. A category of your clause has to apply to COVID 19. So how these force majeure clause is usually work is there are a list of categories, um, and it’s, it’s very typically, if I can go back here for a minute, okay. Strikes fire flood by the occurrence of any other event beyond the control of the parties here too. That’s called the catchall part is the occurrence art strikes, fire, flood, uh, or the occurrence of any other event beyond the control of the parties here to, uh, now this would be a really handy version of this, uh, clause to have in your contract for COVID, it would seem like, uh, I’m going to jump ahead here and skip at the bottom of this page.

Ben:
You’ll see the rule of ejusdem generis. You don’t need to remember that, which you need to know is this, uh, there sometimes catchall language, sometimes there’s catchall language. Uh, that seems like, you know, fire, flood, military intervention or anything just like that, that clause we just read or anything else that, that might be out of your control. Okay. Well there’s this dr of ejusdem generis, which means if the thing that is happening is not somewhat related to somewhat similar to the other things that are actually listed, the catchall phrase will not catch it. So while the language, if you just read your contract, you think, if I just read my contract, I understand what it says. Well, here’s where the law says no you don’t. Because we thought we were special. So the law comes out and says that, uh, if it’s not similar and this is the law in Texas, if it’s not similar, uh, to one of those things listed, then you may be out of luck.

Ben:
So just watch out for that. It’s better to have language that is directly on the nose, uh, when you’re talking about this stuff. All right, so let’s go back here. Alright. So going back for just a second, we’ve talked about the category, the second. Dot there. Okay. Was COVID 19 foreseeable? So there’s some debate. I’ve read a lot of blogs saying that, well, pandemics are actually technically foreseeable and if they’re foreseeable, then there’s some law that force majeure clauses won’t work because there really are supposed to be unforeseeable. Very similar to, in my opinion, in my opinion, I think this argument is not very strong. Long story short, I, I think that very few, uh, force majeure clauses are going to be, uh, thrown out or not utilized by courts. Uh, because the COVID 19 epidemic was foreseeable. I, I don’t, I don’t see it for a lot of kind of nitty-gritty legal reasons.

Ben:
I just, it’s my personal opinion that, that that’s not a very good defense to it, to a force majeure clause. Okay. If notices required, had better been given, this is rule number one in Texas construction. Uh, if you have notice requirements in your contract, uh, you better meet them and almost all, uh, force majeure, uh, paragraphs or terms, uh, require you to provide notice there. We’re going to talk, uh, very, I’m going to hit AIA and consensus docs contracts very briefly here in a minute, but long story short, uh, what force majeure language usually does for you, it doesn’t release your duties under the contract. It gives you more time. Uh, if you’re a subcontractor, if you have a sub that is claiming force majeure, it doesn’t usually release them from having to work with you. It just gives them time. Um, so that’s kind of how you analyze that.

Ben:
If somebody comes at you with one of these things is okay, well you might have one, but you know, you don’t just get to get, collect a paycheck and run off the project. That’s not how this works unless you actually have a consensus doc, a contract, in which case that might be how it works. We’ll talk about that here shortly. Finally, if it does apply, it may excuse the non-performing party from completing their work entirely or only partially. Yeah, that’s what I just talked about. Unless you have a consensus doc, a contract, um, termination and under certain circumstances under the AIA contract, uh, the regular law or a regular, a force majeure clause, um, absent, uh, being drafted in one of those two, uh, contracts usually doesn’t release you from the, from the project entirely.

Ben:
Okay. Uh, at or other backing up for a minute, in force majeure term, uh, in force majeure paragraphs. Uh, there’s usually language called act of God or other act of God. It’s, it’s most frequently used as a catchall. Um, and this definition I gave here is actually the Texas definition of an act of God. It’s an occurrence is caused by an act of God for it is caused directly and exclusively by the violence exclusively. That’s an important word. By the violence of nature, without human intervention or cause and could not have been prevented by reasonable foresight or care if you find yourself thinking, uh, that’s a pretty high standard. Uh, you’re right. Um, so that’s, this kind of goes along with the, the caps, the use of catchall language, in force majeure clauses. If, if your force majeure clause doesn’t say epidemic or disease or, or something kind of in that vicinity, it may not be the strong, the overbearing legal defense you think it is. And it may not be the strong overbearing legal defense that a subcontractor of yours thinks it is. Um, and so it’s important to know these rules of thumb to understand that these things are not Bulletproof if they’re yours or somebody else’s. So there’s, there’s some negotiation to be had here.

Ben:
I say the last thing I say is catch all phrase is actually catch less than you would expect. That’s, that’s what I’ve been discussing up to this point. Um, okay. Now before I get to the repudiation and anticipatory breach or this big fancy word for saying, watch out, watch, watch out for what you say, it can really backfire on you. Um, I did want to discuss briefly, uh, if you have for the folks who have, uh, AIA contracts or consensus docs or federal construction contracts, you’ll want to, you’ll want to pay particular attention here. AIA two Oh one, which is the general contractors contract. They, I also make subcontractor also consensus docs to those two. Um, under section 8.3 0.1, that’s where you look if you have an AIA contract, a hot tip, a unusual delay in deliveries, unavoidable casualties or other causes beyond the contractor’s control or by other causes that the contractor asserts and the architect determines justify, delay that allows you to have a delay.

Ben:
So what is this? It’s a force majeure language. It’s not called force majeure in the AIA or the consensus docs, uh, agreements. It’s called, um, it’s delays and extensions of time in the AIA and it’s a, a national emergency or governmental act in consensus docs in the federal, uh, contracting, it’s called academics and quarantine restrictions because son of a gun, the feds thought ahead on this one. Although their contracts are, you know, usually you’re, you’re looking at something considerable if you’re working for the federal government, if you’re a federal contractor, know exactly what I’m talking about. Even my eyes go cross reading us. So, um, both the AIA and consensus docs have something special in them and that is the potential to terminate a contract. If, uh, in, in the tr, in the, uh, under consensus docs, a national emergency or other governmental act can be used as a basis for termination of the contract.

Ben:
Uh, the owner may also terminate, um, uh, as his, uh, if you would like to. Um, but there’s typically you, you get paid for the work you’ve been, you’ve done at that point plus a premium that’s usually tagged on in the end on the consensus docs. Um, I have negotiated heartily for those premiums before, uh, to to good effect for my sub contractors. Um, and general contractor. So AIA consensus docs. Long story short, you have a force majeure clause. What do you have to do? You have to exercise your notice rights. You gotta tell people you want to utilize these rights. Or if you, if you have an AIA or consensus docs subcontract you, you got to know that, uh, your life just got a little bit less predictable because, uh, subcontractors who walk in your door saying, Hey, uh, I’m looking to, I’m looking to exercise some of these rights.

Ben:
I need more time or I just need out of the contract entirely. That can, that can put a damper on your day as a general contractor. But you need to understand that if it’s an AIA or consensus doc document there, there, there are some their rights may carry water. Now if you have a subcontractor where with the not one of these contracts, maybe a custom drafted contract or uh, you know, oral contracts, they exist. They happen all the time. They happen every day in Texas. Uh, obviously the situation is pretty reversed isn’t it? It’s, uh, you’ve gone from knowing that there’s force majeure language to now thinking in your own head. Yeah. He might be arguing, uh, what we talked about at the beginning, which is, uh, uh, contractual and possibility and practicability frustration of purpose. But what do you know, you know, yes, those defenses exist.

Ben:
No, they’re not very good. They might get a little bit better under post COVID era courts. I actually do expect them to, to get a little bit stronger. I actually expect a case, uh, to declare her eventually, uh, either at the district court level or Supreme court level, but uh, that, uh, uh, COBIT, uh, is going to be, is going to be listed as one of those, uh, impossibility or impracticability uses. I see that coming down the road if the parties litigate, uh, in that direction. Um, alright, last topic I’m going to cover extremely briefly, I’m going to throw it up here for everybody to see repudiation anticipatory breach. Okay. This is how you get in trouble on the phone. This is how your subcontractors get in trouble with you on the phone. This is how you as a general contractor, get in trouble with your owners on the phone.

Ben:
So be careful what you say matters. What is repudiation? It is an absolute and unconditional refusal to perform without just excuse. Okay. This comes in two ways. It comes in the, uh, Hey man, COVID, I can’t do it. I cannot do it. Okay. You’ve just told me an absolute and unconditional refusal to perform. Oh, but without a just excuse. Is COVID a just excuse? That depends on the facts of this certain scenario. How did COVID interact with that company’s ability to perform? Because under this repudiation scheme, that’s in fact what’s going to have to be proved at trial is did it or were you able, would you have actually been able to do it regardless? You just maybe didn’t want to or if it was commercially a worse situation for you to finish the project, something like that. Um, and the jury is going to decide whether, you know, whether and to what extent COVID really stopped you from performing.

Ben:
So whatever you do, don’t get on the phone and just say COVID, stay at home orders. Uh, lots of stuff shutting down, man. I ain’t doing it. Don’t do it. And if you get a phone call that says that, uh, they are, they may very well have breached their contract with you, that opens up, uh, you’re going to need to talk to a lawyer about that. But that opens up a whole new can of worms from that point forward and actually gives you, as the general contractor or a subcontractor, a further legal options, uh, demanding new terms can be, Oh, same thing. That my final final point is a demanding new terms. Okay. So that there is case law on the books that, uh, demanding new terms called, called a holdup game just right in the middle of a contract saying, Hey, I gotta have this, I gotta have this or it ain’t happening.

Ben:
Okay. Demanding new terms can be a breach of your contract. This is not like asking for a change order. Okay? That’s a different situation. That’s asking, demanding that I’m, I need this or I’m off the job. That is potentially a breach of contract. It’s a breach of contract if it’s happening to you. And if you, you make that move. So be very careful in these coping situations because I don’t want anybody giving up their, their right to recover for their work or their honest to God legal or contractual rights, uh, to get either more time or to escape, the construction altogether and get paid for, uh, what you’ve already built already. That is all I have in this presentation. Uh, again, my name is Ben house. Uh, I’m a founding partner at house Perron and house in Houston, Texas. Uh, I, uh, Seth if I’m not available to answer some questions.

Seth:
Yeah, Ben, that was a great presentation and I know a lot of, uh, good information for, um, you know, contractors and anyone that’s in the industry. Um, I’m going to open it up. Uh, we have a lot of participants, so we’ve had a number of questions about getting copies of these slots. So we’re going to go ahead and you know, everyone, um, and I, and I’ve told them that they can, um, ask you questions on the expert center, but I think we have a bunch of shy people today. So unless in the next 30 seconds or so, someone’s going to ask a question, then we’ll wind down. And I guess everyone stay safe and healthy out there. And, uh, you know, we’re from Levelset expert center post questions, get lawyers to answer a point in the right direction at absolutely no cost. You get to speak to people like Ben who are really authorities and thought leaders in their fields, especially within their States. And I know Ben mentioned to me earlier, but, but even though they’re based and certainly work all over Houston, they do work statewide in Texas, um, and we try to, we try and we do a good job of making sure that the construction lawyers in the expert center actually have a lot of experience practicing construction law. So Ben, Ben, anything else or, I don’t see any, uh, any questions right now. Wait, wait, wait. I do see a question. Okay.

Seth:
I don’t know if you’re gonna answer this, but how much of this is to translate to California? I guess we have some California, California person slipped in here. Um, I don’t know if you want to get into that.

Ben:
No, that’s my answer. I can answer it. My answer is I have no idea. Um, I, I can, I can actually do a little bit better than that. Uh, force majeure is not a Texas specific thing. Uh, how, how those, uh, the force majeure, uh, terms are interpreted. That is state specific. Some States say if it doesn’t say if it’s the exact dang word in that term, then you don’t get any more time on your project from force majeure. Uh, other States are much more liberal with it and say, Oh, you got a force majeure clause. They’re all about things being unforeseeable. And because of that, if, if the unforeseeable thing was unforeseeable, we’re going to let you slide a little bit on that. We’re going to, we’re going to interpret this to cover that and give you the more, more time you want or, or maybe even terminate the contract.

Ben:
But, uh, um, yeah, it’s specifically to California. I can’t speak to that. I’m sorry. And we’ve got another question coming in. Um, what can you do if payment is not received? Even after sending lien notices? Can you threaten to stop work unless payment is received? Okay. Um, that depends on your contract. Uh, so non-payment is usually a breach of contract. And what a breach of contract means is, and I don’t want to get heavy in legal jargon here, but what a breach contract means is your duties under a contract are forgiven. Your performance is forgiven. What does that mean? That means if you don’t pay me, I can stop showing up. I don’t have to do anything else now. And that’s good leverage that that can be good ,everage just not showing up because you weren’t paid. Um, it always in, in subsequent lawsuits, it always turns into a fight between, well, he didn’t show up.

Ben:
Well, he didn’t pay you well. He didn’t show up. Well, I didn’t pay there. It gets very factually dense. Um, but uh, the, the critical thing is protect your lien rights, protect your lien rights, protect your lien rights. Um, and the next most critical thing is read your contract because some contracts have, uh, if you have some type of, if this is a result of a payment dispute where you’re asked to do more work, but, uh, the, you haven’t agreed on a price. Okay. Some contracts have specific language that says they can, the general contractor can order you to do the work and we’ll just agree on the price later. And if you don’t do that, if you don’t stay on the site and do the work, you’ve reached your contract. So that’s the only situation-well, it’s not the only situation, but that’s one of the major situations where I would warn against walking off the job.

Ben:
But generally speaking, if you haven’t been paid, uh, that is a breach, a fundamental breach of the contract. Then we’ll have a followup to that and then we’ll, we’ll wind it down here. Someone asks, Chris asked, but does the granting of additional time particularly translate to additional money for the time? No. No, no. Uh, in fact, in my experience, it’s technically been the opposite. It’s, uh, typically not technically. Um, there are such a things and no damage for delay clause. It is a very common cause clause. Uh, I don’t quote me on this, but I think it’s in both AIA and consensus docs, but basically it means that, uh, you know, if the owner causes delay or the general contractor needs to delay for some reason and they send proper notice that they are delaying, you just got to, you don’t have to be mobilized, but you just got to sit there for a little while and you just kinda got to eat it. Unfortunately, a lot of contracts are drafted like that. Now there are terms, um, there, there are, uh, uh, terms in the more sophisticated like AIA and consensus docs contracts that, uh, uh, speak in greater detail to the type and reason for the delay and under certain circumstances read your contract number one. Uh, they’re, they, there is remuneration available, there is money available for those delays, but in most circumstances I’ve seen it’s pretty rare.

Seth:
Well, Ben, thanks again and to all our participants today, I think we, you know, we look forward to more webinars with Ben in the future. Maybe we can get him a post a blog. I know he’s already answering a lot of questions out there. So again, Ben house located in the Houston area and servicing all of the Texas area for construction law. Um, everyone have a great day. Stay safe and uh, look forward to talking to you soon.

Ben:
Thank you everybody. Thanks Ben.