The Potential Criminal Repercussions of Construction Projects

While most contractors assume that “walking” a job will at most lead to civil repercussions, contractors need to be extremely mindful that the Texas Penal Code is written so broadly as to potentially include criminal charges. Specifically, Texas Penal Code Chapter 31 pertains to theft. While at first glance this may seem attenuated, the code is written in such a broad manner as to include a contractor who “walks” a job if said contractor fails to perform and fails to return any amount otherwise unearned. At the heart of this issue is whether the work was simply not performed due to such things as rising construction costs related to the particular scope of work, or whether the contractor simply failed to perform. As any seasoned contractor will tell you, both the scope of work and the contract price are heavily subject to change as the project progresses. The issue that most contractors encounter is a failure to document these changes. Without proper documentation, the point in time where the contractor and the owner disagree as to what should have been accomplished will invariably come. What then of these claims?

While most owners address these issues through a civil suit, it is not necessarily uncommon for an owner to file criminal charges for theft. Without proper documentation showing the various changes in scope or sum, a contractor is in a precarious position.A contractor that performs in an ethical manner is likely safe from criminal conviction as the current state of the law favors a contractor who at least partially performs. However the charge alone could be both personally and financially devastating. As such, contractors should ensure that if they are forced to “walk” a job, they heavily document the nature and reasons why. As always, if you are unsure of what documentation you will need, it is highly advisable to speak to qualified counsel at the outset of the project.

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