PJC Business

C ONTRACTS

PJC 101.47

contract provides for the payment by the owner of the costs of construc tion and a reasonable fee specified in the contract payable to the contrac tor; and (2) the fee is earned as provided by the contract and paid to the con tractor or disbursed from a construction account described by Section 162.006, if applicable. Tex. Prop. Code § 162.001(c). If there is a fact issue regarding this exception, addi tional instructions should be given. Beneficiary. If the existence of a person as a beneficiary is not disputed, the defi nition of “beneficiary” should be omitted and the court should instruct the jury that the person is a beneficiary. Intent to defraud. If there is a fact issue regarding intent to defraud, the follow ing instruction should be submitted: A person acted with “intent to defraud” if he— [Insert one or more of the following instructions.] 1. retained, used, disbursed, or diverted trust funds with the intent to deprive the beneficiaries of the trust funds; [ or ] 2. retained, used, disbursed, or diverted trust funds and failed to establish or maintain a construction account or failed to establish or maintain an account record for the construction account; [ or ] 3. used, disbursed, or diverted trust funds that were paid to him in reliance on an affidavit furnished by him if the affidavit contains false information relating to his payment of current or past-due obligations. The foregoing instructions are prescribed in Tex. Prop. Code § 162.005. Only the appropriate instruction(s) raised by the circumstances should be submitted. Intentionally or knowingly. The Property Code does not define “intentionally” or “knowingly,” so the Committee has not provided a definition of these terms. Use of “or.” If more than one of the alternative instructions listed above regarding intent to defraud is used, each must be separated by the word or , because a finding of any one of the acts or practices defined in the instructions would support recovery under the Texas Construction Trust Funds Act. Because each of these acts or practices is actionable under the Act, the intent-to-defraud instruction should be adapted to include the kind of conduct involved in a given case.

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