Construction Delay Claims in Texas (What Contractors and Owners Can Recover When a Project Runs Late)

Construction delay claims in Texas pay money when three things are true. The other side caused the delay, it pushed back the completion date, and you gave the notice your contract requires. Delays nobody controls, such as unusually severe weather, usually earn more time and no money. A no-damages-for-delay clause can cut off recovery, though Texas courts won’t enforce one against an owner’s deliberate, wrongful interference.

Most delay claims are won or lost on paper before anyone files suit. A 7-day notice clause for change requests can still be enforced, even though Texas voids short deadlines for notice of a damages claim. A daily liquidated damages rate can fail as a penalty, and public owners in Austin add statutory deadlines of their own.

If your project is already behind, Kelly Legal Group’s construction attorneys can read your notice and delay clauses while those deadlines are still open. From there, the same attorney can press your claim or defend against one, through a lawsuit if it comes to that. Start with the question that decides most of these cases, which is who caused the delay.

Which Construction Delays Let You Recover Money in Texas?

Delay claims in construction turn on cause. A delay the owner caused usually earns time and money. A delay nobody controlled usually earns time only. A delay you caused earns nothing and can expose you to the owner’s damages.

Lawyers and schedulers sort these with two labels. “Excusable” means you get more time. “Compensable” means you also get paid for the extra time.

The delay also has to hit the critical path. That’s the chain of activities that sets the completion date. A late foundation pour pushes back everything after it, so it’s critical. A late paint order on a task with three weeks of slack (or “float”) usually isn’t.

On Austin jobs, late permits and inspections are a frequent trigger. Who carries that risk depends on your contract’s permit clause, so read it before you label the delay.

What Happens When Both Sides Caused the Delay?

Concurrent delay is the hardest version of the claim. If the owner held up the steel package during the same weeks your framing crew was short, each side caused part of the slip.

The general rule is that neither side collects delay damages unless someone can separate the two causes day by day. That usually takes a scheduling expert working from your updated schedules. Without those updates, the analysis gets far weaker.

Why Can a Missed Notice Deadline End Your Delay Claim in Texas?

Miss the notice deadline and you can lose a claim you’d otherwise win. Most Texas construction contracts require written notice of a delay or change within a set number of days, often 7 to 21. Courts enforce those windows against contractors who let them pass.

You may have heard that Texas voids short notice deadlines. That’s only partly true. Texas Civil Practice and Remedies Code §16.071 voids a contract deadline shorter than 90 days for notice of a claim for damages. It applies when that notice is a condition of your right to sue.

Courts read that statute narrowly. In Wood Group USA, Inc. v. Targa NGL Pipeline Co. (Houston First Court of Appeals, 2023), the court held that §16.071 doesn’t reach notice of an event or a change-order request. It enforced a 7-day notice clause against a contractor asking for an added $25 million in change orders.

So treat the short deadline as real. Your written delay notice should include these items.

• The date the delay started and what caused it
• The activities affected and the expected effect on the completion date
• What you’re asking for (time, money, or a reservation of your right to claim money later)
• The contract section you’re giving notice under
• Updates as the delay continues, sent on the schedule the contract sets

Send it the day you know, even if the cost isn’t clear yet. A notice that reserves the money claim beats a perfect notice that arrives late.

Can a No-Damages-for-Delay Clause Stop Your Claim in Texas?

Sometimes. Texas generally enforces a no-damages-for-delay clause, which limits you to extra time for a delay. Courts carve out exceptions, though, and the biggest one covers an owner’s deliberate, wrongful conduct.

The leading case started on a Houston wharf. In Zachry Construction Corp. v. Port of Houston Authority (Tex. 2014), the Port approved the contractor’s freeze-wall method in a change order, then ordered a redesign without it two weeks later. The project finished more than two and a half years late.

The contract said Zachry got no money for delay “regardless of the source,” including the Port’s own fault. The jury awarded $18.6 million in delay damages anyway. The Texas Supreme Court upheld the award, holding that a no-damages-for-delay clause can’t shield an owner from liability for its own deliberate, wrongful interference.

The court also reaffirmed five situations where these clauses don’t apply. A clause won’t bar recovery when the delay was any of the following.

• Not intended or contemplated by the parties when they signed
• Caused by fraud, misrepresentation, or other bad faith by the party relying on the clause
• So long that you’d have been justified in abandoning the contract
• Outside the specific delays the clause lists
• Caused by active interference or arbitrary and capricious conduct

These exceptions are fact fights, and a judge often can’t resolve them on paper before trial. That gives a contractor bargaining power in settlement talks. In 2025, Texas lawmakers considered SB 776, which would have voided these clauses on public projects for delays the government alone caused. It didn’t become law, so the contract and Zachry still control.

When Are Liquidated Damages an Unenforceable Penalty in Texas?

Liquidated damages for construction delays are enforceable in Texas when two things were true at signing. The owner’s harm was hard to estimate, and the daily rate was a reasonable forecast of it. Even a reasonable rate fails if it ends up far out of line with the owner’s real loss.

The two-part test comes from Phillips v. Phillips (Tex. 1991). In FPL Energy, LLC v. TXU Portfolio Management Co. (Tex. 2014), the court added a second look and called the problem an “unbridgeable discrepancy” between the clause and the actual damages.

The burden falls on the party challenging the clause. In Atrium Medical Center v. Houston Red C (Tex. 2020), the court said that party has to prove the difference, typically with evidence of the owner’s actual damages and any failure to mitigate.

For owners and developers, the rate should track real carrying costs. Jeff Kelly spent 15 years in construction and ran a 23-unit townhome development from financing through the final sale before he practiced law. He knows what a month of loan interest, insurance, and lost rent adds up to on a project. That monthly number is what a daily rate has to forecast.

For contractors, the defense starts in discovery. Ask for the owner’s lease-up schedule, loan statements, and rent rolls. If the owner’s real loss was a fraction of the liquidated damages it withheld, you have a penalty argument.

What Can You Recover on a Texas Construction Delay Claim?

What do you get paid for when an owner-caused delay stretches the job? Usually the added cost of staying on site longer, plus the cost of speeding up or losing productivity because of the delay. Each item needs its own proof.

Owners recover in the other direction when the contractor caused the delay. That means liquidated damages if the clause holds up. Otherwise, it’s actual damages such as lost rent, extended loan interest, extra insurance, and temporary space.

Most claims of any size need a scheduling expert to tie each dollar to a delay on the critical path. If payment also stopped during the dispute, the Texas Prompt Payment Act rules for contractors may add interest on what you’re owed.

How Do You Document a Delay While the Project Is Still Running?

Build the record now, while the people and the paper are still on site. A claim assembled at closeout from memory and a final schedule rarely survives an owner’s expert.

1. Send written notice the day you learn of the delay, citing the contract section and reserving your right to claim money.
2. Update the schedule on the contract’s cycle and save each version. The comparison between updates is your proof of critical path impact.
3. Keep daily logs with crew counts, equipment on site, equipment idle, weather, and visitors.
4. Take dated photos of stalled areas, missing materials, and work you couldn’t start.
5. Open separate cost codes for delay work, overtime, and standby so the costs never mix with base scope.
6. Confirm every verbal owner directive in an email the same day.
7. Add reservation-of-rights language when you sign change orders and payment releases.

Avoid these moves during the delay.

• Signing a change order that settles “all effects” of an event before you know the schedule impact
• Accepting a verbal extension without a written change order
• Waiting until closeout to price the delay

The contractor in Wood Group lost added claims partly because an earlier change order called itself full compensation. Read the release language in each change order before you sign it.

Do Public Projects in Texas Follow Different Delay Claim Rules?

Yes. Claims against Texas governmental owners run through statutes that waive immunity only on set terms. Those statutes control your notice deadline and what you can recover. Notice requirements in suits against governmental entities are jurisdictional, so a missed one can end the case.

In Zachry, the Texas Supreme Court held that the local-government statute waives immunity for delay damages the contract doesn’t call for. Public contracts also tend to stack their own claim steps on top of the statute, so calendar both.

Bottom Line for Texas Contractors and Owners

A Texas delay claim comes down to four facts. Who caused the delay, whether it moved the completion date, whether notice went out on time, and what the contract says about money.

Send notice the day you know and keep the daily record that proves the rest. Before anyone withholds or claims liquidated damages, test the rate against the owner’s real loss.

Common Questions About Texas Construction Delay Claims

What Compensation Can You Claim for a Delayed Construction Project in Texas?

The compensation you can claim for a delayed construction project in Texas covers costs the owner’s delay created. That usually means extended field overhead, idle equipment, escalation, acceleration, and lost productivity. Owners can claim liquidated damages or actual losses such as lost rent when the contractor caused it.

What Is Considered a Critical Delay in Construction?

A critical delay in construction is one that pushes back the project’s completion date because it hits an activity on the critical path. A delay on a task with float to spare usually isn’t critical and rarely supports a claim for time.

What Counts as an Excusable Delay in a Texas Construction Contract?

An excusable delay in a Texas construction contract is one your contract excuses, typically owner-caused delays and outside events such as unusually severe weather. Owner-caused excusable delays usually earn money too. Outside events usually earn time only.

How Long Do You Have to Give Notice of a Construction Delay Claim in Texas?

The time you have to give notice of a construction delay claim in Texas starts with your contract. Windows of 7 to 21 days for a delay or change event are common. A deadline under 90 days for notice of a damages claim is void under §16.071. Claims against a state agency need written notice within 180 days.

Is Bad Weather an Excusable Delay in Texas?

Bad weather counts as an excusable delay in Texas only when your contract excuses it and the weather was unusual for that time of year. Most contracts give extra days for abnormal weather and no money. Keep daily weather records for each lost day.

Can Signing a Lien Waiver Release Your Delay Claim in Texas?

Signing a lien waiver can release your delay claim in Texas if the waiver’s wording reaches it. In Zachry, the court held that the releases the contractor signed for progress payments didn’t cover liquidated damages it had disputed from the start. Note any open delay claim in writing when you sign.

What Can an Owner Do When a Contractor Keeps Delaying a Commercial Project?

An owner whose contractor keeps delaying a commercial project should send written notice under the contract’s default clause and track the days for liquidated damages. Follow the cure and termination steps exactly, since a wrongful termination can flip the claim. Homeowners in a new-home contract can read our guide on how to get out of a builder contract in Texas.

Get Your Delay Notice Reviewed Before the Contract Deadline Runs

The cheapest point to protect a delay claim is the week the delay starts. Kelly Legal Group has represented Central Texas contractors, developers, and owners since 2009. We can review your notice and delay clauses, help you build the record, and handle the claim if it goes to court or arbitration.

Delays rarely travel alone. If the dispute also involves unpaid work, see our guides to mechanic’s lien and contractor payment disputes and Texas construction retainage laws. For the full range of project disputes, start with our guide to construction litigation in Texas. For breach remedies and filing deadlines, read about contractor breach of contract in Texas.

Call Kelly Legal Group at (512) 505-0053 or schedule a consultation with our Austin construction attorneys before your next notice deadline passes.