Subcontract Review for Texas Contractors
Texas has specific laws protecting subcontractors. Our AI identifies clauses that may be unenforceable under Texas law—and flags the ones that are perfectly legal but could still hurt you.
Key Texas Construction Laws We Check
Texas Insurance Code §151.102
Anti-Indemnity Statute
Void to the extent it requires indemnification for the indemnitee's sole or partial negligence in construction contracts.
💡 Broad form indemnity clauses are unenforceable in Texas
Texas Property Code §53
Mechanic's Lien Rights
Subcontractors have 15 days after the 15th of each month to send required notices. Lien must be filed within 4 months.
💡 Strict deadlines—miss them and you lose your lien rights
Texas Property Code §28.004
Prompt Payment Act
Owner must pay contractor within 35 days. Contractor must pay sub within 7 days of receiving payment.
💡 1.5% monthly interest on late payments
No Statutory Limit
Retainage
Texas does not cap retainage by statute. Industry standard is 5-10%.
💡 Watch for excessive retainage (>10%) in contracts
Common Contract Issues in Texas
- Pay-if-paid clauses (may be enforceable in Texas—negotiate to pay-when-paid)
- Excessive retainage without release timeline
- No-damage-for-delay clauses (generally enforceable in Texas)
- Distant venue clauses (Dallas contractor forced to litigate in Houston)
- Broad indemnification (unenforceable per §151.102)
- Waiver of lien rights before payment received
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Frequently Asked Questions: Texas Subcontractor Contracts
Are pay-if-paid clauses enforceable in Texas?
Yes, pay-if-paid clauses are generally enforceable in Texas if the language clearly shifts the risk of owner non-payment to the subcontractor. However, they must be unambiguous. Courts will construe ambiguous payment provisions as "pay-when-paid" (timing) rather than "pay-if-paid" (condition precedent). Texas subcontractors should negotiate to convert pay-if-paid to pay-when-paid language.
What does Texas Insurance Code §151.102 protect against?
Texas Insurance Code §151.102 is an anti-indemnity statute that makes "broad form" indemnification clauses void in construction contracts. This means a GC cannot require a subcontractor to indemnify them for the GC's own negligence. The clause is void "to the extent" it requires such indemnification. SubShield flags these clauses and explains your protections.
How long do I have to file a mechanic's lien in Texas?
In Texas, subcontractors must file their mechanic's lien affidavit no later than the 15th day of the 4th month after the month in which your work was completed or the contract was terminated. For residential projects, you must also send preliminary notices. Missing these deadlines means losing your lien rights entirely.
What is the Texas Prompt Payment Act?
Texas Property Code Chapter 28 requires owners to pay contractors within 35 days of receiving a proper pay application. Contractors must then pay subcontractors within 7 days of receiving that payment. Late payments accrue interest at 1.5% per month. SubShield checks if your contract's payment terms comply with these requirements.