86R6933 CLG-F
By: Thompson of Harris H.B. No. 2268
A BILL TO BE ENTITLED
AN ACT
relating to a provision in a construction contract that
incorporates the terms and conditions of another document.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 272.0001, Business & Commerce Code, is
amended to read as follows:
Sec. 272.0001. DEFINITIONS [DEFINITION]. In this chapter:
(1) "Construction[,"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, or
repair 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.
(2) "Copy" means an accurate reproduction of an
original document reproduced in paper form or in an electronic
format that a person can access, download, save, and print for the
person's own records.
(3) "Original contract" means an agreement to which an
owner is a party either directly or by implication of law.
(4) "Original contractor" means a person contracting
with an owner directly or through the owner's agent.
(5) "Owner" means a person who owns any interest in
real property or an authorized agent, trustee, or receiver of the
person.
(6) "Subcontractor" means a person who furnishes labor
or materials to fulfill an obligation to an original contractor or
to a subcontractor of any tier to perform all or part of the work
required by an original contract.
SECTION 2. The heading to Section 272.001, Business &
Commerce Code, is amended to read as follows:
Sec. 272.001. VOIDABLE CONTRACT PROVISIONS [PROVISION].
SECTION 3. Section 272.001, Business & Commerce Code, is
amended by adding Subsections (c), (d), (e), and (f) to read as
follows:
(c) Except as provided by Subsection (f), a provision in a
construction contract between an original contractor and owner that
incorporates the terms and conditions of another document, by
reference or otherwise, is voidable by the original contractor if
the owner does not provide a copy of the incorporated document to
the original contractor before the contract is executed. This
subsection does not preclude the owner from redacting information
from a document to be incorporated into the contract, provided that
any redacted information may not be incorporated into the contract
by reference or otherwise.
(d) Except as provided by Subsection (f), a provision in a
construction contract between a subcontractor and an original
contractor that incorporates the terms and conditions of another
document, by reference or otherwise, is voidable by the
subcontractor if the original contractor does not provide a copy of
the incorporated document to the subcontractor before the contract
is executed. This subsection does not preclude the original
contractor from redacting information from a document to be
incorporated into the contract, provided that any redacted
information may not be incorporated into the contract by reference
or otherwise.
(e) A provision in a construction contract made void by a
party to the contract under Subsection (c) or (d) is void only to
the extent of the provision's applicability to the incorporated
document not provided to the party.
(f) Subsections (c) and (d) do not apply to the
incorporation of a publicly available document.
SECTION 4. The changes in law made by this Act apply only to
a contract that is entered into on or after the effective date of
this Act.
SECTION 5. This Act takes effect September 1, 2019.