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A BILL TO BE ENTITLED
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AN ACT
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relating to choice of law and venue for certain construction |
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contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Chapter 272, Business & Commerce |
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Code, is amended to read as follows: |
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CHAPTER 272. LAW APPLICABLE TO CERTAIN CONSTRUCTION CONTRACTS [FOR
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CONSTRUCTION OR REPAIR OF REAL PROPERTY IMPROVEMENTS] |
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SECTION 2. Chapter 272, Business & Commerce Code, is |
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amended by adding Section 272.0001 and amending Sections 272.001 |
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and 272.002 to read as follows: |
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Sec. 272.0001. DEFINITION. In this chapter, "construction |
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contract" means a contract, subcontract, or agreement entered into |
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or made by an owner, architect, engineer, contractor, construction |
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manager, subcontractor, supplier, or material or equipment lessor |
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for the design, construction, alteration, renovation, remodeling, |
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or repair of, or for the furnishing of material or equipment for, a |
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building, structure, appurtenance, or other improvement to or on |
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public or private real property, including moving, demolition, and |
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excavation connected with the real property. The term includes an |
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agreement to which an architect, engineer, or contractor and an |
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owner's lender are parties regarding an assignment of the |
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construction contract or other modifications thereto. |
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Sec. 272.001. VOIDABLE CONTRACT PROVISION. (a) This |
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section applies only to a construction contract concerning [that is
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principally for the construction or repair of an improvement to] |
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real property located in this state. |
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(b) If a construction contract or an agreement collateral to |
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or affecting the construction contract contains a provision making |
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the contract or agreement or any conflict arising under the |
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contract or agreement subject to another state's law, litigation in |
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the courts of another state, or arbitration in another state, that |
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provision is voidable by a [the] party obligated by the contract or |
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agreement to perform the work that is the subject of the |
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construction contract [or repair]. |
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Sec. 272.002. INAPPLICABILITY OF CHAPTER [CONTRACT
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PRINCIPALLY FOR CONSTRUCTION OR REPAIR OF REAL PROPERTY
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IMPROVEMENTS]. This chapter does not apply to a construction [(a)
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For purposes of this chapter, a contract is principally for the
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construction or repair of an improvement to real property located
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in this state if the contract obligates a party, as the party's
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principal obligation under the contract, to provide labor or labor
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and materials as a general contractor or subcontractor for the
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construction or repair of an improvement to real property located
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in this state.
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[(b)
For purposes of this chapter, a contract is not
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principally for the construction or repair of an improvement to
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real property located in this state if the] contract that: |
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(1) is a partnership agreement or other agreement |
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governing an entity or trust; |
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(2) provides for a loan or other extension of credit |
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and the party promising to perform the work that is the subject of |
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the construction contract [construct or repair the improvement] is |
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doing so as part of the party's agreements with the lender or other |
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person who extends credit; or |
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(3) is for the management of real property or |
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improvements and the obligation to perform the work that is the |
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subject of the construction contract [construct or repair the
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improvement] is part of that management. |
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[(c)
Subsections (a) and (b) do not provide an exclusive
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list of the situations in which a contract is or is not principally
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for the construction or repair of an improvement to real property
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located in this state.] |
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SECTION 3. The changes in law made by this Act apply only to |
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a contract, or an agreement collateral to or affecting a contract, |
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entered into on or after the effective date of this Act. A |
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contract, or an agreement collateral to or affecting a contract, |
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entered into before the effective date of this Act is governed by |
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the law as it existed immediately before the effective date of this |
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Act, and that law is continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2017. |