By: Creighton S.B. No. 807
(In the Senate - Filed February 9, 2017; February 22, 2017,
read first time and referred to Committee on State Affairs;
April 25, 2017, reported favorably by the following vote: Yeas 9,
Nays 0; April 25, 2017, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to choice of law and venue for certain construction
contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Chapter 272, Business & Commerce
Code, is amended to read as follows:
CHAPTER 272. LAW APPLICABLE TO CERTAIN CONSTRUCTION CONTRACTS [FOR
CONSTRUCTION OR REPAIR OF REAL PROPERTY IMPROVEMENTS]
SECTION 2. Chapter 272, Business & Commerce Code, is
amended by adding Section 272.0001 and amending Sections 272.001
and 272.002 to read as follows:
Sec. 272.0001. DEFINITION. In this chapter, "construction
contract" means a contract, subcontract, or agreement entered into
or made by an owner, architect, engineer, contractor, construction
manager, subcontractor, supplier, or material or equipment lessor
for the design, construction, alteration, renovation, remodeling,
repair, or maintenance of, or for the furnishing of material or
equipment for, a building, structure, appurtenance, or other
improvement to or on public or private real property, including
moving, demolition, and excavation connected with the real
property. The term includes an agreement to which an architect,
engineer, or contractor and an owner's lender are parties regarding
an assignment of the construction contract or other modifications
thereto.
Sec. 272.001. VOIDABLE CONTRACT PROVISION. (a) This
section applies only to a construction contract concerning [that is
principally for the construction or repair of an improvement to]
real property located in this state.
(b) If a construction contract or an agreement collateral to
or affecting the construction contract contains a provision making
the contract or agreement or any conflict arising under the
contract or agreement subject to another state's law, litigation in
the courts of another state, or arbitration in another state, that
provision is voidable by a [the] party obligated by the contract or
agreement to perform the work that is the subject of the
construction contract [or repair].
Sec. 272.002. INAPPLICABILITY OF CHAPTER [CONTRACT
PRINCIPALLY FOR CONSTRUCTION OR REPAIR OF REAL PROPERTY
IMPROVEMENTS]. This chapter does not apply to a construction
[(a) For purposes of this chapter, a contract is principally for
the construction or repair of an improvement to real property
located in this state if the contract obligates a party, as the
party's principal obligation under the contract, to provide labor
or labor and materials as a general contractor or subcontractor for
the construction or repair of an improvement to real property
located in this state.
[(b) For purposes of this chapter, a contract is not
principally for the construction or repair of an improvement to
real property located in this state if the] contract that:
(1) is a partnership agreement or other agreement
governing an entity or trust;
(2) provides for a loan or other extension of credit
and the party promising to perform the work that is the subject of
the construction contract [construct or repair the improvement] is
doing so as part of the party's agreements with the lender or other
person who extends credit; or
(3) is for the management of real property or
improvements and the obligation to perform the work that is the
subject of the construction contract [construct or repair the
improvement] is part of that management.
[(c) Subsections (a) and (b) do not provide an exclusive
list of the situations in which a contract is or is not principally
for the construction or repair of an improvement to real property
located in this state.]
SECTION 3. The changes in law made by this Act apply only to
a contract, or an agreement collateral to or affecting a contract,
entered into on or after the effective date of this Act. A
contract, or an agreement collateral to or affecting a contract,
entered into before the effective date of this Act is governed by
the law as it existed immediately before the effective date of this
Act, and that law is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2017.
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