Texas 2023 - 88th Regular

Texas House Bill HB2657 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	88R23274 SHH-D
2	2	By: Leach H.B. No. 2657
3	3	Substitute the following for H.B. No. 2657:
4	4	By: Isaac C.S.H.B. No. 2657
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to voidable provisions contained in certain construction
10	10	contracts.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 272.0001, Business & Commerce Code, is
13	13	amended to read as follows:
14	14	Sec. 272.0001. DEFINITIONS [DEFINITION]. In this chapter:
15	15	(1) "Construction[,"construction] contract" means a
16	16	contract, subcontract, or agreement entered into or made by an
17	17	owner, architect, engineer, contractor, construction manager,
18	18	subcontractor, supplier, or material or equipment lessor for the
19	19	design, construction, alteration, renovation, remodeling, or
20	20	repair of, or for the furnishing of material or equipment for, a
21	21	building, structure, appurtenance, or other improvement to or on
22	22	public or private real property, including moving, demolition, and
23	23	excavation connected with the real property. The term includes an
24	24	agreement to which an architect, engineer, or contractor and an
25	25	owner's lender are parties regarding an assignment of the
26	26	construction contract or other modifications thereto.
27	27	(2) "Copy" means an accurate reproduction of an
28	28	original document reproduced in paper form or in an electronic
29	29	format that a person can access, download, save, and print for the
30	30	person's own records.
31	31	(3) "Original contract" means an agreement to which an
32	32	owner is a party either directly or by implication of law.
33	33	(4) "Original contractor" means a person contracting
34	34	with an owner directly or through the owner's agent.
35	35	(5) "Owner" means a person who owns any interest in
36	36	real property or an authorized agent, trustee, or receiver of the
37	37	person.
38	38	(6) "Subcontractor" means a person who furnishes labor
39	39	or materials to fulfill an obligation to an original contractor or
40	40	to a subcontractor of any tier to perform all or part of the work
41	41	required by an original contract.
42	42	SECTION 2. The heading to Section 272.001, Business &
43	43	Commerce Code, is amended to read as follows:
44	44	Sec. 272.001. VOIDABLE CONTRACT PROVISIONS [PROVISION].
45	45	SECTION 3. Section 272.001, Business & Commerce Code, is
46	46	amended by adding Subsections (c), (d), (e), (f), (g), and (h) to
47	47	read as follows:
48	48	(c) Except as provided by Subsection (g), a provision in a
49	49	construction contract between an original contractor and owner that
50	50	incorporates another document that contains terms and conditions,
51	51	by reference or otherwise, is voidable by the original contractor
52	52	if, on written request, the owner does not provide a copy of the
53	53	incorporated document to the original contractor on or before the
54	54	10th day before the date the contract is executed. This subsection
55	55	does not preclude the owner from redacting information from a
56	56	document to be incorporated into the contract, provided that any
57	57	redacted information may not be incorporated into the contract by
58	58	reference or otherwise. The owner may request the original
59	59	contractor to sign, date, and submit to the owner a written
60	60	statement acknowledging receipt of the copy of the incorporated
61	61	document. The written statement acknowledging receipt must be
62	62	provided separately from the construction contract.
63	63	(d) Except as provided by Subsection (g), a provision in a
64	64	construction contract between a subcontractor and an original
65	65	contractor that incorporates another document that contains terms
66	66	and conditions, by reference or otherwise, is voidable by the
67	67	subcontractor if, on written request, the original contractor does
68	68	not provide a copy of the incorporated document to the
69	69	subcontractor on or before the 10th day before the date the contract
70	70	is executed. This subsection does not preclude the original
71	71	contractor from redacting information from a document to be
72	72	incorporated into the contract, provided that any redacted
73	73	information may not be incorporated into the contract by reference
74	74	or otherwise. The original contractor may request the
75	75	subcontractor to sign, date, and submit to the original contractor
76	76	a written statement acknowledging receipt of the copy of the
77	77	incorporated document. The written statement acknowledging
78	78	receipt must be provided separately from the construction contract.
79	79	(e) Except as provided by Subsection (g), a provision in a
80	80	construction contract between a subcontractor and another
81	81	subcontractor that incorporates another document that contains
82	82	terms and conditions, by reference or otherwise, is voidable by the
83	83	subcontractor who is to furnish labor or materials to fulfill an
84	84	obligation to the other subcontractor if, on written request, the
85	85	subcontractor to whom the requesting subcontractor is obligated
86	86	does not provide a copy of the incorporated document to the
87	87	requesting subcontractor on or before the 10th day before the date
88	88	the contract is executed. This subsection does not preclude a
89	89	subcontractor from redacting information from a document to be
90	90	incorporated into the contract, provided that any redacted
91	91	information may not be incorporated into the contract by reference
92	92	or otherwise. The subcontractor providing the copy of the document
93	93	may request the other subcontractor to sign, date, and submit a
94	94	written statement acknowledging receipt of the copy of the
95	95	incorporated document. The written statement acknowledging
96	96	receipt must be provided separately from the construction contract.
97	97	(f) A provision in a construction contract made void by a
98	98	party to the contract under Subsection (c), (d), or (e) is void only
99	99	to the extent of the provision's applicability to the incorporated
100	100	document or a portion of the incorporated document that was not
101	101	provided to the party.
102	102	(g) Subsections (c), (d), and (e) do not apply to the
103	103	incorporation of a publicly available document.
104	104	(h) An owner, original contractor, or subcontractor may
105	105	provide a copy of an incorporated document to the other party to a
106	106	construction contract under Subsection (c), (d), or (e) by
107	107	providing a link to the document on an Internet website or file
108	108	hosting service that may be accessed by the other party free of
109	109	charge for the duration of the term of the contract. The version of
110	110	the incorporated document that is accessible on the date the party
111	111	receives the information necessary to access the document is the
112	112	version of the document that is incorporated into the contract.
113	113	SECTION 4. Chapter 272, Business & Commerce Code, is
114	114	amended by adding Section 272.003 to read as follows:
115	115	Sec. 272.003. WAIVER OF CHAPTER PROHIBITED. A person may
116	116	not waive this chapter, including a provision of this chapter, by
117	117	contract or other means. A purported waiver of this chapter is void
118	118	as against public policy.
119	119	SECTION 5. The changes in law made by this Act apply only to
120	120	a contract that is entered into or renewed on or after the effective
121	121	date of this Act.
122	122	SECTION 6. This Act takes effect September 1, 2023.