82R1941 AJA-D
By: Estes S.B. No. 1216
A BILL TO BE ENTITLED
AN ACT
relating to determination of the validity and enforceability of a
contract containing an arbitration agreement.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 171, Civil Practice and
Remedies Code, is amended by adding Section 171.027 to read as
follows:
Sec. 171.027. DETERMINATION OF VALIDITY AND ENFORCEABILITY
OF CONTRACT CONTAINING AGREEMENT TO ARBITRATE. (a) If a party
opposing an application to compel arbitration or making an
application to stay arbitration asserts that the contract
containing the agreement to arbitrate is not valid or enforceable,
notwithstanding any provision of the contract to the contrary, the
court shall try the issue promptly and may order arbitration only if
the court determines that the contract containing the agreement to
arbitrate is valid and enforceable against the party seeking to
avoid arbitration.
(b) A determination under this section that a contract is
valid and enforceable does not affect the court's authority to stay
arbitration or refuse to compel arbitration on any other ground
provided by law.
SECTION 2. The change in law made by this Act applies only
to a contract entered into on or after the effective date of this
Act. A contract entered into before the effective date of this Act
is governed by the law in effect immediately before that date, and
that law is continued in effect for that purpose.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.