Bankruptcy Because of Delayed Payments Case In Texas
In Aer-Aerotron, Inc. v. Texas Department of Transportation, 997 S.W.2d 687 (Tex. App.--Austin 1999, pet. filed), pursuant to a competitive bidding process and a written contract with the Texas Department of Transportation, Aerotron supplied 75 base-station radios and 50 remote-control radios for a total contract amount of $ 468,550. See Aer-Aerotron, 997 S.W.2d at 688.
The contract required Aerotron to ship a sample of each radio to the Department, which then had up to 30 days to test them for conformity to the contract specifications.
Aerotron alleged that it shipped the radios and the Department accepted them.
In the first year of the contract, the Department increased its purchase order from 125 to 300, raising the total contract price to $ 993,900.
The Department first promised payment, then delayed it, and then failed to pay, forcing Aerotron to file bankruptcy.
Aerotron alleged in its petition that the State, by accepting goods and services, extending the term of the contract, increasing its orders, twice promising to pay the balance due but failing to do so, and requesting and receiving technical modifications and assistance, waived its immunity from suit for breach of contract when it engaged in actions that "fully implicated it in the performance of the contract." Id.