Interstate Contracting Corp. v. City of Dallas is a suit between a contractor and the City of Dallas over levee construction and storm-water pool excavation around a city water plant. The case involved when and whether an owner warrants conditions on the site under Texas law.
A subcontractor carrying out part of the contract found that its excavations did not yield sufficient fill material. On behalf of the subcontractor, the contractor sued, claiming that the city had warranted soil conditions and specifications.
The court had earlier certified to the Texas Supreme Court the question of whether a contractor can pursue a subcontractor’s claim against the owner. The question had been answered yes. This left the question of whether, under Texas law, the contractor or the owner bore the risk of soil conditions. The Fifth Circuit held that generally, the owner does not warrant conditions unless it does so explicitly and that in this incident, the contract documents placed the burden on the contractor. A jury verdict for the contractor was thus reversed.
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