Texas 2023 - 88th Regular

Texas Senate Bill SB2207 Compare Versions

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Version 2 (New)

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1	1	88R5699 SHH-F
2	2	By: Parker S.B. No. 2207
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to voidable provisions contained in certain construction
8	8	contracts.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 272.0001, Business & Commerce Code, is
11	11	amended to read as follows:
12	12	Sec. 272.0001. DEFINITIONS [DEFINITION]. In this chapter:
13	13	(1) "Construction[,"construction] contract" means a
14	14	contract, subcontract, or agreement entered into or made by an
15	15	owner, architect, engineer, contractor, construction manager,
16	16	subcontractor, supplier, or material or equipment lessor for the
17	17	design, construction, alteration, renovation, remodeling, or
18	18	repair of, or for the furnishing of material or equipment for, a
19	19	building, structure, appurtenance, or other improvement to or on
20	20	public or private real property, including moving, demolition, and
21	21	excavation connected with the real property. The term includes an
22	22	agreement to which an architect, engineer, or contractor and an
23	23	owner's lender are parties regarding an assignment of the
24	24	construction contract or other modifications thereto.
25	25	(2) "Copy" means an accurate reproduction of an
26	26	original document reproduced in paper form or in an electronic
27	27	format that a person can access, download, save, and print for the
28	28	person's own records.
29	29	(3) "Original contract" means an agreement to which an
30	30	owner is a party either directly or by implication of law.
31	31	(4) "Original contractor" means a person contracting
32	32	with an owner directly or through the owner's agent.
33	33	(5) "Owner" means a person who owns any interest in
34	34	real property or an authorized agent, trustee, or receiver of the
35	35	person.
36	36	(6) "Subcontractor" means a person who furnishes labor
37	37	or materials to fulfill an obligation to an original contractor or
38	38	to a subcontractor of any tier to perform all or part of the work
39	39	required by an original contract.
40	40	SECTION 2. The heading to Section 272.001, Business &
41	41	Commerce Code, is amended to read as follows:
42	42	Sec. 272.001. VOIDABLE CONTRACT PROVISIONS [PROVISION].
43	43	SECTION 3. Section 272.001, Business & Commerce Code, is
44	44	amended by adding Subsections (c), (d), (e), (f), (g), and (h) to
45	45	read as follows:
46	46	(c) Except as provided by Subsection (g), a provision in a
47	47	construction contract between an original contractor and owner that
48	48	incorporates the terms and conditions of another document, by
49	49	reference or otherwise, is voidable by the original contractor if,
50	50	on written request, the owner does not provide a copy of the
51	51	incorporated document to the original contractor on or before the
52	52	10th day before the date the contract is executed. This subsection
53	53	does not preclude the owner from redacting information from a
54	54	document to be incorporated into the contract, provided that any
55	55	redacted information may not be incorporated into the contract by
56	56	reference or otherwise. The owner may request the original
57	57	contractor to sign, date, and submit to the owner a written
58	58	statement acknowledging receipt of the copy of the incorporated
59	59	document. The written statement acknowledging receipt must be
60	60	provided separately from the construction contract.
61	61	(d) Except as provided by Subsection (g), a provision in a
62	62	construction contract between a subcontractor and an original
63	63	contractor that incorporates the terms and conditions of another
64	64	document, by reference or otherwise, is voidable by the
65	65	subcontractor if, on written request, the original contractor does
66	66	not provide a copy of the incorporated document to the
67	67	subcontractor on or before the 10th day before the date the contract
68	68	is executed. This subsection does not preclude the original
69	69	contractor from redacting information from a document to be
70	70	incorporated into the contract, provided that any redacted
71	71	information may not be incorporated into the contract by reference
72	72	or otherwise. The original contractor may request the
73	73	subcontractor to sign, date, and submit to the original contractor
74	74	a written statement acknowledging receipt of the copy of the
75	75	incorporated document. The written statement acknowledging
76	76	receipt must be provided separately from the construction contract.
77	77	(e) Except as provided by Subsection (g), a provision in a
78	78	construction contract between a subcontractor and another
79	79	subcontractor that incorporates the terms and conditions of another
80	80	document, by reference or otherwise, is voidable by the
81	81	subcontractor who is to furnish labor or materials to fulfill an
82	82	obligation to the other subcontractor if, on written request, the
83	83	subcontractor to whom the requesting subcontractor is obligated
84	84	does not provide a copy of the incorporated document to the
85	85	requesting subcontractor on or before the 10th day before the date
86	86	the contract is executed. This subsection does not preclude a
87	87	subcontractor from redacting information from a document to be
88	88	incorporated into the contract, provided that any redacted
89	89	information may not be incorporated into the contract by reference
90	90	or otherwise. The subcontractor providing the copy of the document
91	91	may request the other subcontractor to sign, date, and submit a
92	92	written statement acknowledging receipt of the copy of the
93	93	incorporated document. The written statement acknowledging
94	94	receipt must be provided separately from the construction contract.
95	95	(f) A provision in a construction contract made void by a
96	96	party to the contract under Subsection (c), (d), or (e) is void only
97	97	to the extent of the provision's applicability to the incorporated
98	98	document not provided to the party.
99	99	(g) Subsections (c), (d), and (e) do not apply to the
100	100	incorporation of a publicly available document.
101	101	(h) An owner, original contractor, or subcontractor may
102	102	provide a copy of an incorporated document to the other party to a
103	103	construction contract under Subsection (c), (d), or (e) by
104	104	providing a link to the document on an Internet website or file
105	105	hosting service that may be accessed by the other party free of
106	106	charge for the duration of the contract. The version of the
107	107	incorporated document that is accessible on the date the party
108	108	receives the information necessary to access the document is the
109	109	version of the document that is incorporated into the contract.
110	110	SECTION 4. Chapter 272, Business & Commerce Code, is
111	111	amended by adding Section 272.003 to read as follows:
112	112	Sec. 272.003. WAIVER OF CHAPTER PROHIBITED. A person may
113	113	not waive this chapter, including a provision of this chapter, by
114	114	contract or other means. A purported waiver of this chapter is
115	115	void.
116	116	SECTION 5. The changes in law made by this Act apply only to
117	117	a contract that is entered into or renewed on or after the effective
118	118	date of this Act.
119	119	SECTION 6. This Act takes effect September 1, 2023.