By: Cain S.B. No. 611
A BILL TO BE ENTITLED
AN ACT
1-1 relating to certain criteria for enforceability of an
1-2 indemnification agreement or release agreement.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter D, Chapter 35, Business & Commerce
1-5 Code, is amended by adding Section 35.43 to read as follows:
1-6 Sec. 35.43. ENFORCEABILITY OF INDEMNIFICATION AGREEMENT OR
1-7 RELEASE AGREEMENT. (a) In this section:
1-8 (1) "Disclosure criterion" means a standard imposed to
1-9 draw attention to a particular term of an agreement or a
1-10 requirement that a particular obligation of a party to the
1-11 agreement be specifically expressed or expressed by the use of
1-12 particular language, including a standard or requirement that:
1-13 (A) the obligation be expressed in specific,
1-14 clear, or unequivocal language, rather than by implication;
1-15 (B) the term be set forth in print, type, or
1-16 another form of writing that is conspicuous, as defined by Section
1-17 1.201, Business & Commerce Code, or that is otherwise designed to
1-18 attract attention to the term;
1-19 (C) the obligation be expressed by the use of
1-20 the word "negligence" or other particular words;
1-21 (D) the agreement contain a statement of the
1-22 consequences of the particular term or that the parties intend
1-23 certain consequences; or
1-24 (E) the term or obligation meet another
2-1 criterion for notice or expression, regardless of whether the
2-2 criterion has been previously imposed by the courts of this state.
2-3 (2) "Indemnification agreement" means an agreement in
2-4 writing to defend or indemnify a person against loss, liability,
2-5 cost, or expense, including attorney's fees.
2-6 (3) "Release agreement" means an agreement in writing
2-7 to release a person from liability.
2-8 (b) The legality, validity, or enforceability of an
2-9 indemnification agreement or release agreement is not affected by
2-10 the fact that all or part of the indemnification agreement or
2-11 release agreement does not meet a disclosure criterion.
2-12 (c) Subsection (b) of this section does not apply to an
2-13 indemnification agreement or release agreement if the indemnitor or
2-14 the releasing party is an individual who entered into the agreement
2-15 primarily for personal, family, or household purposes.
2-16 (d) Whether an agreement is an indemnification or release
2-17 agreement to which Subsection (b) of this section applies is not
2-18 affected by whether:
2-19 (1) the loss, liability, cost, or expense against
2-20 which a person is to be defended or indemnified, or the liability
2-21 from which a person is released, is wholly or partially a result of
2-22 the indemnitee's or released party's past, present, or future
2-23 action or inaction;
2-24 (2) the action or inaction constitutes negligence or
2-25 gross negligence; or
2-26 (3) the loss, liability, cost, or expense against
2-27 which a person is to be defended or indemnified is a liability to,
3-1 or a loss, cost, or expense of, the indemnitor.
3-2 SECTION 2. This Act applies to an agreement entered into
3-3 before, on, or after the effective date of this Act, except that
3-4 this Act does not apply to an agreement that is the subject of an
3-5 action that was filed in a court of competent jurisdiction before
3-6 the effective date of this Act, and the law in effect immediately
3-7 before the effective date of this Act is continued in effect only
3-8 for the purpose of determining the rights and liabilities of a
3-9 party to such an action.
3-10 SECTION 3. This Act takes effect September 1, 1995.
3-11 SECTION 4. The importance of this legislation and the
3-12 crowded condition of the calendars in both houses create an
3-13 emergency and an imperative public necessity that the
3-14 constitutional rule requiring bills to be read on three several
3-15 days in each house be suspended, and this rule is hereby suspended.