The Core Problem

A subcontractor dispute is any breakdown in the prime–sub relationship—usually over money, scope, schedule, or workmanship—that threatens job-site harmony and, ultimately, project delivery. Because Texas enforces strict prompt-payment deadlines, lien notice schemes, and a pay-if-paid rule that is valid only when drafted with precision, early management of these conflicts is critical.

Familiar Flashpoints

• Payment shortfalls – progress draws held up by owner funding issues, back-charges, or disputed change-order pricing.
• Scope creep – instructions from the field that expand a sub’s obligations without a written change order.
• Quality challenges – rework demands or alleged code non-compliance.
• Schedule slippage – delayed fronts, out-of-sequence resequencing, or stacked trades.
• Early termination – prime removes a sub for alleged default; the sub contests the grounds and claims extra costs.

Governing Legal Ground Rules

• The subcontract controls – but only if it is clear. Texas courts enforce pay-if-paid clauses and no-damage-for-delay provisions when the language is unequivocal and the risk allocation is unmistakable.
• Prompt payment statutes – On private jobs, owners must fund primes within thirty-five days of an approved invoice; primes must pay subs within seven days of receipt. On public work, Chapter 2251 requires payment within thirty days. Interest and attorney’s fees accrue on late payments.
• Mechanic’s liens – Subtiers secure unpaid balances by sending a third-month notice (15th day of the third month after each month of work) and filing a lien affidavit by the fifteenth day of the fourth month (third month on residential).
• Payment-bond claims – Texas public contracts and federal projects substitute a bond for a lien. Bond claimants send the statutorily timed notice and may sue the surety if payment does not follow.
• Texas Trust-Fund Act – Construction funds are trust property; officers who divert them may face personal liability.

Best-Practice Playbook

For General Contractors

1. Draft it right. Nail down scope, schedule, payment terms, change-order procedure, and dispute resolution in plain, unconditional language.
2. Pay on time. Honor statutory timelines or issue a written dispute notice detailing the withholding basis.
3. Document directions. Field directives become change orders—confirm them in writing before the sub mobilizes extra labor.
4. Keep communication open. Weekly coordination meetings and transparent look-ahead schedules reduce surprises.
5. Maintain a paper trail. Daily reports, inspection logs, and pay-application approvals become decisive evidence if litigation looms.

For Subcontractors

1. Read before you sign. Understand pay-if-paid triggers, retainage terms, and the notice periods that protect lien or bond rights.
2. Perform to spec. Meet or exceed the contract documents; defective work erodes payment leverage.
3. Invoice accurately and on time. Provide backup—change-order numbers, delivery tickets, and manpower reports.
4. Send statutory notices early. Preserve lien or bond claims even if you expect quick resolution; rights lost cannot be revived.
5. Address problems immediately. Surface scope gaps, RFI delays, or material shortages before they snowball into default notices.

Connect With Us

Most subcontractor conflicts can be resolved through clear contracts, proactive communication, and disciplined documentation. When those measures falter, Texas law offers swift statutory remedies—prompt-payment interest, mechanic’s liens, trust-fund penalties, and bond claims—to restore cash flow and keep crews productive. Knowing when and how to deploy those tools is the difference between a minor job-site hiccup and a project-wide derailment. For tailored guidance, our law firm can step in early, align risk allocations, and steer the dispute to a prompt, cost-effective close.