Texas Senate Bill SB737

Texas 2019 - 86th Regular

Caption

Relating to adjudication of claims arising from certain written contracts with state agencies.

Impact

The bill places limitations on the potential damages that can be awarded in adjudications against state agencies for breach of contract. Specifically, it stipulates that claims can only include amounts due under the contract, reasonable attorney's fees, and interest as specified in the contract. However, it explicitly excludes consequential and exemplary damages, which can significantly limit recovery for plaintiffs. This limitation is intended to minimize the financial impact on state agencies, yet it raises concerns about whether it adequately protects the interests of contractors who may face significant losses due to state agency breaches.

Summary

Senate Bill 737 aims to amend regulations surrounding the adjudication of claims that arise from certain written contracts involving state agencies. One of the primary provisions of this bill is the waiver of sovereign immunity for state agencies in cases of breach of contract, essentially allowing parties to sue the state for specified breaches. This change could potentially facilitate easier legal recourse for businesses and contractors engaging with state agencies, marking a significant shift in how contract disputes are handled.

Contention

While the intention behind SB737 is to provide clarity and structure to the adjudication process, there are points of contention regarding the limited scope of recoverable damages. Critics of the bill may feel that the restrictions on damages could disproportionately impact smaller contractors who may already be vulnerable when entering into contracts with complex state agencies. Proponents argue that the amendments will create a more predictable and manageable liability framework for the state, fostering a balance between protecting tax dollars and providing fair treatment to contractors.