Texas House Bill HB3203

Texas 2009 - 81st Regular

• Out of House Committee: 5/6/09

Caption

Relating to the recovery of attorney's fees in an action for breach of contract involving certain local governmental entities.

Impact

By enacting this bill, Texas law will now provide a clearer path for contractors seeking compensation for legal fees when pursuing claims against local government entities for breach of contract. This change could potentially increase the willingness of contractors to engage with local governments, knowing that their legal expenses may be recoverable in case of a dispute. Moreover, this could lead to more informed contract negotiations and encourage local governments to fulfill their contractual obligations diligently.

Summary

House Bill 3203 amends the Local Government Code concerning the recovery of attorney's fees in actions related to breaches of contract with certain local governmental entities. The bill explicitly allows for the recovery of reasonable and necessary attorney's fees, which are deemed equitable and just, as part of the total compensation awarded in breach of contract claims. This change intends to clarify the financial responsibilities of local governmental entities when they engage in contracts and subsequently default on them.

Contention

A notable point of contention surrounding the bill is the potential financial impact on local governmental entities. Critics may argue that allowing for the recovery of attorney's fees could lead to increased litigation and financial liabilities, which may burden local budgets. Furthermore, there could be concerns about the balance between protecting contractors' rights and maintaining fiscal responsibility within local governments. As such, the discussions may revolve around ensuring that the reform supports fair business practices while safeguarding public resources.