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A BILL TO BE ENTITLED
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AN ACT
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relating to determination of the validity and enforceability of a |
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contract containing an arbitration agreement. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 171, Civil Practice and |
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Remedies Code, is amended by adding Section 171.027 to read as |
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follows: |
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Sec. 171.027. DETERMINATION OF VALIDITY AND ENFORCEABILITY |
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OF CONTRACT CONTAINING AGREEMENT TO ARBITRATE. (a) If a party |
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opposing an application to compel arbitration or making an |
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application to stay arbitration asserts that the contract |
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containing the agreement to arbitrate is not valid or enforceable, |
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notwithstanding any provision of the contract to the contrary, the |
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court shall try the issue promptly and may order arbitration only if |
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the court determines that the contract containing the agreement to |
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arbitrate is valid and enforceable against the party seeking to |
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avoid arbitration. |
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(b) A determination under this section that a contract is |
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valid and enforceable does not affect the court's authority to stay |
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arbitration or refuse to compel arbitration on any other ground |
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provided by law. |
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SECTION 2. The change in law made by this Act applies only |
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to a contract entered into on or after the effective date of this |
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Act. A contract entered into before the effective date of this Act |
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is governed by the law in effect immediately before that date, and |
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that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2011. |