Houston Business & Commercial Law Blog

Some people in Texas who work in construction or development may be familiar with contract disputes over buildings. In California, such a dispute has gone to court as the contractor that built the Salesforce Transit Center and Transbay Transit Center, Webcor/Obayashi Joint Venture, filed a lawsuit in the San Francisco Superior Court on Oct. 17 for $150 million against the Transbay Joint Powers Authority.

The project has been plagued with problems. The transit center went over budget and took longer to build than scheduled. After its completion, support beams developed cracks, and the building remains closed. This suit is unrelated to those cracks and claims that TJPA is trying to avoid paying its bill by blaming WOJV for costs, delays and more and that TJPA would not lengthen the contract despite knowing why the problems were happening.

An entrepreneur in Texas may find that owning the building in which their business is housed can be beneficial in many ways. However, someone interested in buying a commercial building should take time to consider their options and ask pertinent questions.

The business owner should consider whether the option they are pursuing provides a functionality that is suited for their company. This includes verifying if there is a functional layout, sufficient space and the right amenities. The potential buyer should know exactly how much electrical power, space, clear height and parking area will be needed for the business to function properly. Whether or not the site is able to accommodate overhead cranes and have ample enough storage and a sufficient electrical power grid for machinery may also be factors to consider.

It is often possible to mitigate risk in the future with careful contract drafting. Clearly-defined agreements, fairness and good communication help parties avoid Texas construction contract disputes. Among the ways contracts can be used to mitigate future risk are by clarifying unallowable labor, defining change order reporting, setting rates and caps on equipment and including bidding procedures.

It's easier to manage the cost of a construction project when there are well-defined unallowable and allowable labor rates. This depends on whether labor costs are based on predetermined rates or actual wages. All parties should understand what rates are billed to and associated with a particular project. If the contract language is not clear on this point, disputes may arise.

Texas business owners may face disputes that arise out of customer issues or contract problems. When the threat of litigation arises, it is important for businesses to protect themselves and prepare for the future. Litigation doesn't need to hurt the company seriously, and taking steps can help firms to handle it properly. By working with a business lawyer, companies can develop a plan to address serious issues as they arise.

In general, lawsuits over business disputes do not suddenly appear; instead, they will come out of long-standing issues with another party. In many cases, small businesses want to try to keep costs down and may try to resolve these issues themselves. However, once litigation arises, it is important for a company owner to rely on an attorney for professional help. All of a business' communications can become fodder for discovery, so it is important to take clear guidance on the conversations to follow.