Texas Construction Default Attorneys Provide Sound Legal Support to Clients

North Texas attorneys assist with construction contract termination disputes

Termination is one of the most difficult and impactful issue on a construction project. It should not be taken lightly. Terminating a construction contract often leads to project disruptions, delays and additional project costs. If a contract termination is wrongful, the terminating party could be prevented from recovering its additional costs, forced to pay the terminated party and lose any profit it hoped to make on the project. At Hayes, Berry, White & Vanzant, LLP, our attorneys work to resolve disputes if a contract is in jeopardy and protect the rights of our clients in any termination scenario. We provide effective legal support to property owners, developers, contractors, subcontractors and suppliers throughout the construction industry from offices in Denton, Flower Mound and Gainesville. 

Be prepared for construction contract default or termination 

Construction contracts may be terminated for a number of reasons: cause, convenience or mutual agreement. Typically, there are signs when a project is at risk of termination, for example, project delays, non-payment, deficient performance, inadequate manpower or an unqualified workforce. Each case is unique, and the specific steps that must be followed depend on the type of termination and the specific language in the agreement. 

Often, the key to successfully navigating a termination scenario is to be aware of project issues and strategic preparation before it is too late. If you do not know what is wrong and do not have plan, you could find yourself at a severe disadvantage. That is why it is important to contact our experienced construction attorneys at the first sign of trouble, so we can evaluate the project issues and advise you on how to proceed in order to avoid the pitfalls associated with termination.

The process for terminating a construction contract in Texas

The rough outline of a proper termination of a Texas construction agreement generally requires the following basic measures:

• Reviewing the contract with the help of your construction lawyer to ensure you remain compliant with stated termination procedures. 
• Providing a cure notice to the defaulting party that describes the issues and gives them the opportunity to correct problems. 
• Notifying the party in writing (if issues have not been corrected) that you are terminating the contract. 

You should also check your document systems to make sure that you have captured all potentially relevant documents, set document preservation procedures in place and developed a file organization system that clearly captures your concerns and communications with the other party in case of subsequent legal action. 

Risks of construction contract termination

There is significant risk involved in terminating construction contracts. In addition to damaging relationships between parties, building projects can suffer financial losses and schedule delays. You could also potentially be liable for damages if the termination is found to be improper. Our law firm provides strategic guidance to help clients salvage commercial real estate projects and other types of building and repair jobs whenever possible. 

Strategies to prevent unnecessary contract termination

Experienced project management, effective communication and properly drafted contracts are keys to navigating problems and disputes on construction projects. Construction contracts should clearly and thoroughly outline the scope of work, expected completion dates, payment structures and dispute resolution procedures. We draft detailed and enforceable contracts for all types of construction deals. 

When construction contract termination is the best option

Sometimes terminating a contract is the most viable option. This can be the case in the following situations:

• Ongoing performance failures
• Material breach of contract
• Unfulfilled contractual responsibilities 
• Financial instability of a party 
• Safety violations
• Persistent disputes and disagreements 

We can counsel you about how to end the contractual relationship in a legal, efficient manner. 

Performance bonds

A performance bond is solely for the protection of owners. Under a performance bond, a surety backs the general contractor’s completion of the project. The bond is in the amount of the contract and conditioned on the contractor’s performance of the work. If the contractor does not perform its work, the surety could be obligated to fund the completion of the project up to the amount of the contract.

Steps to take if your project is at risk of default

The first step in deciding whether to make a claim against a performance bond is typically based on the actions, or inaction, of others. The owner is usually faced with terminating a contractor due to the contractor’s substandard performance. It is critical that the owner take all necessary steps to perfect its claim under a performance bond, such as formally terminating the contractor by written notice in compliance with the terms of the construction contract. 

Our attorneys are experienced dealing with performance bonds and can advise you on how to properly perfect a performance bond claim.

Contact an experienced construction default attorney to schedule a consultation

The Texas attorneys at Hayes, Berry, White & Vanzant, LLP deliver sound legal guidance on issues related to construction contract terminations and defaults. Call us at 940-230-2386 or contact us online to arrange a consultation at one of our offices in Denton, Flower Mound or Gainesville.