The recent flurry of litigation over defective Chinese drywall has put a new focus on an old problem--products liability in the construction law environment. When is a builder responsible for products it innocently sold or installed, and is indemnity available? Moreover, what is the potential liability for a builder in these situations?

Texas law provides statutory indemnity for innocent retailers, which would include builders in many cases. It also excuses these parties from liability in a great number of situations as well.