89R4644 PRL-D
By: Hayes H.B. No. 3874
A BILL TO BE ENTITLED
AN ACT
relating to voidable provisions contained in certain construction
contracts.
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), (f), (g), (h), and (i)
to read as follows:
(c) Except as provided by Subsections (g) and (h), a
provision in a construction contract between an original contractor
and owner that incorporates another document that contains terms
and conditions, by reference or otherwise, is voidable by the
original contractor if, on written request, the owner does not
provide a copy of the incorporated document to the original
contractor on or before the 10th day before the date 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. The
owner may request the original contractor to sign, date, and submit
to the owner a written statement acknowledging receipt of the copy
of the incorporated document. The written statement acknowledging
receipt must be provided separately from the construction contract.
(d) Except as provided by Subsections (g) and (h), a
provision in a construction contract between a subcontractor and an
original contractor that incorporates another document that
contains terms and conditions, by reference or otherwise, is
voidable by the subcontractor if, on written request, the original
contractor does not provide a copy of the incorporated document to
the subcontractor on or before the 10th day before the date 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. The original contractor may request the
subcontractor to sign, date, and submit to the original contractor
a written statement acknowledging receipt of the copy of the
incorporated document. The written statement acknowledging
receipt must be provided separately from the construction contract.
(e) Except as provided by Subsections (g) and (h), a
provision in a construction contract between a subcontractor and
another subcontractor that incorporates another document that
contains terms and conditions, by reference or otherwise, is
voidable by the subcontractor who is to furnish labor or materials
to fulfill an obligation to the other subcontractor if, on written
request, the subcontractor to whom the requesting subcontractor is
obligated does not provide a copy of the incorporated document to
the requesting subcontractor on or before the 10th day before the
date the contract is executed. This subsection does not preclude a
subcontractor 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. The subcontractor providing the copy of the document
may request the other subcontractor to sign, date, and submit a
written statement acknowledging receipt of the copy of the
incorporated document. The written statement acknowledging
receipt must be provided separately from the construction contract.
(f) A provision in a construction contract made void by a
party to the contract under Subsection (c), (d), or (e) is void only
to the extent of the provision's applicability to the incorporated
document or a portion of the incorporated document that was not
provided to the party.
(g) Subsections (c), (d), and (e) do not apply to the
incorporation of a publicly available document accessible with or
without charge.
(h) Subsections (c), (d), and (e) do not apply in an
emergency if all documents incorporated by reference are provided
simultaneously with the contract prior to execution. For purposes
of this subsection, "emergency" means a sudden, urgent occurrence
that requires immediate action.
(i) An owner, original contractor, or subcontractor may
provide a copy of an incorporated document to the other party to a
construction contract under Subsection (c), (d), or (e) by
providing a link to the document on an Internet website or file
hosting service that may be accessed by the other party free of
charge for the duration of the term of the contract. The version of
the incorporated document that is accessible on the date the party
receives the information necessary to access the document is the
version of the document that is incorporated into the contract.
SECTION 4. Chapter 272, Business & Commerce Code, is
amended by adding Section 272.003 to read as follows:
Sec. 272.003. WAIVER OF CHAPTER PROHIBITED. A person may
not waive this chapter, including a provision of this chapter, by
contract or other means. A purported waiver of this chapter is
against public policy and is void.
SECTION 5. The changes in law made by this Act apply only to
a contract that is entered into or renewed on or after the effective
date of this Act.
SECTION 6. This Act takes effect September 1, 2025.