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A BILL TO BE ENTITLED
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AN ACT
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relating to a provision in a construction contract that |
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incorporates the terms and conditions of another document. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 272.0001, Business & Commerce Code, is |
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amended to read as follows: |
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Sec. 272.0001. DEFINITIONS [DEFINITION]. In this chapter: |
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(1) "Construction[,"construction] contract" means a |
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contract, subcontract, or agreement entered into or made by an |
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owner, architect, engineer, contractor, construction manager, |
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subcontractor, supplier, or material or equipment lessor for the |
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design, construction, alteration, renovation, remodeling, or |
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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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(2) "Copy" means an accurate reproduction of an |
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original document reproduced in paper form or in an electronic |
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format that a person can access, download, save, and print for the |
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person's own records. |
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(3) "Original contract" means an agreement to which an |
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owner is a party either directly or by implication of law. |
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(4) "Original contractor" means a person contracting |
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with an owner directly or through the owner's agent. |
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(5) "Owner" means a person who owns any interest in |
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real property or an authorized agent, trustee, or receiver of the |
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person. |
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(6) "Subcontractor" means a person who furnishes labor |
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or materials to fulfill an obligation to an original contractor or |
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to a subcontractor of any tier to perform all or part of the work |
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required by an original contract. |
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SECTION 2. The heading to Section 272.001, Business & |
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Commerce Code, is amended to read as follows: |
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Sec. 272.001. VOIDABLE CONTRACT PROVISIONS [PROVISION]. |
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SECTION 3. Section 272.001, Business & Commerce Code, is |
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amended by adding Subsections (c), (d), (e), (f), (g), and (h) to |
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read as follows: |
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(c) Except as provided by Subsection (g), a provision in a |
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construction contract between an original contractor and owner that |
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incorporates the terms and conditions of another document, by |
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reference or otherwise, is voidable by the original contractor if, |
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on written request, the owner does not provide a copy of the |
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incorporated document to the original contractor on or before the |
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10th day before the date the contract is executed. This subsection |
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does not preclude the owner from redacting information from a |
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document to be incorporated into the contract, provided that any |
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redacted information may not be incorporated into the contract by |
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reference or otherwise. The owner may request the original |
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contractor to sign, date, and submit to the owner a written |
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statement acknowledging receipt of the copy of the incorporated |
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document. The written statement acknowledging receipt must be |
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provided separately from the construction contract. |
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(d) Except as provided by Subsection (g), a provision in a |
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construction contract between a subcontractor and an original |
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contractor that incorporates the terms and conditions of another |
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document, by reference or otherwise, is voidable by the |
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subcontractor if, on written request, the original contractor does |
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not provide a copy of the incorporated document to the |
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subcontractor on or before the 10th day before the date the contract |
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is executed. This subsection does not preclude the original |
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contractor from redacting information from a document to be |
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incorporated into the contract, provided that any redacted |
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information may not be incorporated into the contract by reference |
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or otherwise. The original contractor may request the |
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subcontractor to sign, date, and submit to the original contractor |
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a written statement acknowledging receipt of the copy of the |
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incorporated document. The written statement acknowledging |
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receipt must be provided separately from the construction contract. |
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(e) Except as provided by Subsection (g), a provision in a |
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construction contract between a subcontractor and another |
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subcontractor that incorporates the terms and conditions of another |
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document, by reference or otherwise, is voidable by the |
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subcontractor who is to furnish labor or materials to fulfill an |
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obligation to the other subcontractor if, on written request, the |
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subcontractor to whom the requesting subcontractor is obligated |
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does not provide a copy of the incorporated document to the |
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requesting subcontractor on or before the 10th day before the date |
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the contract is executed. This subsection does not preclude a |
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subcontractor from redacting information from a document to be |
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incorporated into the contract, provided that any redacted |
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information may not be incorporated into the contract by reference |
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or otherwise. The subcontractor providing the copy of the document |
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may request the other subcontractor to sign, date, and submit a |
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written statement acknowledging receipt of the copy of the |
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incorporated document. The written statement acknowledging |
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receipt must be provided separately from the construction contract. |
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(f) A provision in a construction contract made void by a |
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party to the contract under Subsection (c), (d), or (e) is void only |
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to the extent of the provision's applicability to the incorporated |
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document not provided to the party. |
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(g) Subsections (c), (d), and (e) do not apply to the |
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incorporation of a publicly available document. |
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(h) An owner, original contractor, or subcontractor may |
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provide a copy of an incorporated document to the other party to a |
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construction contract under Subsection (c), (d), or (e) by |
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providing a link to the document on an Internet website or file |
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hosting service that may be accessed by the other party free of |
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charge for the duration of the contract. The version of the |
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incorporated document that is accessible on the date the party |
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receives the information necessary to access the document is the |
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version of the document that is incorporated into the contract. |
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SECTION 4. The changes in law made by this Act apply only to |
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a contract that is entered into on or after the effective date of |
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this Act. |
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SECTION 5. This Act takes effect September 1, 2019. |