Warren Buffett opines that “risk comes from not knowing what you’re doing.’’ This applies to our industry, as owners ask contractors to assume the risk of inaccurate contract documents and unknown or differing site conditions that may be encountered after construction begins. Texas law allows “freedom of contract’—owners can shift these risks to contractors. What happens if the contract contains unclear or contradictory language as to who is responsible for these risks? A judge or jury may decide the parties’ intent. This all-too familiar fact pattern is illustrated by MasTec North America Inc. v. El Paso Field Services LP, a

Contractors spend considerable time negotiating contracts before signing up to do a project. Particular attention is often paid to provisions that shift risks between the parties, such as liability for damages, non-payment, insurance, delays and concealed job-site conditions. By the time a contractor executes a contract, he usually knows exactly what he is signing. But the same attention may not be given to language in other contract documents that are signed during the course of constructing the project, such as payment applications and releases. Provisions that a contractor accepts after thorough negotiations can be drastically modified with the simple stroke

WHITLEY Even in today’s difficult economic climate, the federal government is planning, funding and building projects. This may appeal to otherwise private commercial contractors and subcontractors seeking to fill the void left by the recession. Contracting with the federal government can be profitable, but it can also be dangerous for those new to the process. The following are just a few examples of complex federal contracting laws to consider and should be fully understood by before entering the world of federal contracting. Authority Structure The authority structure of the federal government is rigid and must be respected. Different government personnel

Construction businesses today do not have the margins to write-off cost overruns or unpaid contract balances as they could have in the past when there were more projects and higher profits. More parties are willing to fight for the last dollar. These disputes can add up, and the attorney’s fees can be disproportionately large. Without a compromise or other alternative, construction businesses must proceed with litigation and hope to manage attorney’s fees so they do not approach -- or exceed -- the amount in dispute. But there are other options. The American Arbitration Association, or AAA, and JAMS, the “Resolution

The 2009 legislative session included many new laws that will directly affect the Texas construction industry. What follows are the most important laws coming out of the recent session, as well as a few bills that may be revived in the 2011 legislative session or if the governor calls a special session later this year. WHITLEY Fraudulent Lien Statute The legislature revised this statute to afford greater protection to lien claimants. This statute gives a property owner the right to sue a lien claimant for fraud if the claimant filed an invalid lien. The previous version, as well as recent