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A BILL TO BE ENTITLED
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AN ACT
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relating to voidable provisions contained in 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. 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), (h), and (i) |
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to read as follows: |
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(c) Except as provided by Subsections (g) and (h), a |
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provision in a construction contract between an original contractor |
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and owner that incorporates another document that contains terms |
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and conditions, by reference or otherwise, is voidable by the |
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original contractor if, on written request, the owner does not |
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provide a copy of the incorporated document to the original |
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contractor on or before the 10th day before the date the contract is |
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executed. This subsection does not preclude the owner from |
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redacting information from a document to be incorporated into the |
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contract, provided that any redacted information may not be |
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incorporated into the contract by reference or otherwise. The |
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owner may request the original contractor to sign, date, and submit |
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to the owner a written statement acknowledging receipt of the copy |
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of the incorporated document. The written statement acknowledging |
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receipt must be provided separately from the construction contract. |
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(d) Except as provided by Subsections (g) and (h), a |
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provision in a construction contract between a subcontractor and an |
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original contractor that incorporates another document that |
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contains terms and conditions, by reference or otherwise, is |
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voidable by the subcontractor if, on written request, the original |
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contractor does not provide a copy of the incorporated document to |
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the subcontractor on or before the 10th day before the date the |
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contract is executed. This subsection does not preclude the |
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original contractor from redacting information from a document to |
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be 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 Subsections (g) and (h), a |
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provision in a construction contract between a subcontractor and |
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another subcontractor that incorporates another document that |
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contains terms and conditions, by reference or otherwise, is |
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voidable by the subcontractor who is to furnish labor or materials |
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to fulfill an obligation to the other subcontractor if, on written |
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request, the subcontractor to whom the requesting subcontractor is |
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obligated does not provide a copy of the incorporated document to |
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the requesting subcontractor on or before the 10th day before the |
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date 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 or a portion of the incorporated document that was not |
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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 accessible with or |
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without charge. |
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(h) Subsections (c), (d), and (e) do not apply in an |
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emergency if all documents incorporated by reference are provided |
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simultaneously with the contract prior to execution. For purposes |
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of this subsection, "emergency" means a sudden, urgent occurrence |
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that requires immediate action. |
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(i) 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 term of the contract. The version of |
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the 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. Chapter 272, Business & Commerce Code, is |
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amended by adding Section 272.003 to read as follows: |
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Sec. 272.003. WAIVER OF CHAPTER PROHIBITED. A person may |
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not waive this chapter, including a provision of this chapter, by |
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contract or other means. A purported waiver of this chapter is |
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against public policy and is void. |
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SECTION 5. The changes in law made by this Act apply only to |
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a contract that is entered into or renewed on or after the effective |
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date of this Act. |
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SECTION 6. This Act takes effect September 1, 2025. |