Wednesday, December 25, 2013

Gulf Construction Co. v. Self case brief

Gulf Construction Co. v. Self case brief summary
676 S.W.2d 624

CASE SYNOPSIS
Appellants, general contractors and bonding companies, in two separate lawsuits sought review of judgment from the 156th and 36th District Courts of San Patricio County (Texas), which entered judgment for appellee subcontractors who sought to recover payment for labor and materials furnished by appellees to appellant general contractors.

CASE FACTS
Appellee subcontractors brought two separate lawsuits to recover payment for labor and materials they furnished to appellants, general contractors and bonding companies.

DISCUSSION

  • The court affirmed separate judgments rendered by the trial court against appellants in favor of each appellee, holding that the contracts between the parties merely included a covenant dealing with "terms of payment," rather than a condition precedent. 
  • Therefore, the court held, appellants could not shift the risk of non-payment by the owner to appellees. 
  • The court found that the risk of non-payment by the owner on a construction contract was not shifted from the contractor to the subcontractor unless there was a clear, unequivocal and expressed agreement between the parties to do so. 
  • The court also ruled that the parties' written stipulations were a binding contract between the parties and between the parties and the court, and that the trial court did not err by sustaining appellees' objection to evidence offered by appellants which was contrary to the stipulations. 
  • The court also found that there was no error where the trial court awarded prejudgment interest to appellees as damages under equitable principles.
CONCLUSION
The court affirmed the trial court's judgment allowing appellee subcontractors in two separate lawsuits to recover payment for labor and materials furnished by appellees to appellant general contractors. The court held that because the contracts between the parties provided a covenant dealing with "terms of payment," rather than a condition precedent, appellants could not shift the risk of non-payment by the owner to appellees.

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