Texas 2025 - 89th Regular

Texas House Bill HB3874 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R4644 PRL-D
2	2	By: Hayes H.B. No. 3874
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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), (h), and (i)
47	47	to read as follows:
48	48	(c) Except as provided by Subsections (g) and (h), a
49	49	provision in a construction contract between an original contractor
50	50	and owner that incorporates another document that contains terms
51	51	and conditions, by reference or otherwise, is voidable by the
52	52	original contractor if, on written request, the owner does not
53	53	provide a copy of the incorporated document to the original
54	54	contractor on or before the 10th day before the date the contract is
55	55	executed. This subsection does not preclude the owner from
56	56	redacting information from a document to be incorporated into the
57	57	contract, provided that any redacted information may not be
58	58	incorporated into the contract by reference or otherwise. The
59	59	owner may request the original contractor to sign, date, and submit
60	60	to the owner a written statement acknowledging receipt of the copy
61	61	of the incorporated document. The written statement acknowledging
62	62	receipt must be provided separately from the construction contract.
63	63	(d) Except as provided by Subsections (g) and (h), a
64	64	provision in a construction contract between a subcontractor and an
65	65	original contractor that incorporates another document that
66	66	contains terms and conditions, by reference or otherwise, is
67	67	voidable by the subcontractor if, on written request, the original
68	68	contractor does not provide a copy of the incorporated document to
69	69	the subcontractor on or before the 10th day before the date the
70	70	contract is executed. This subsection does not preclude the
71	71	original contractor from redacting information from a document to
72	72	be 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 Subsections (g) and (h), a
80	80	provision in a construction contract between a subcontractor and
81	81	another subcontractor that incorporates another document that
82	82	contains terms and conditions, by reference or otherwise, is
83	83	voidable by the subcontractor who is to furnish labor or materials
84	84	to fulfill an obligation to the other subcontractor if, on written
85	85	request, the subcontractor to whom the requesting subcontractor is
86	86	obligated does not provide a copy of the incorporated document to
87	87	the requesting subcontractor on or before the 10th day before the
88	88	date 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 accessible with or
104	104	without charge.
105	105	(h) Subsections (c), (d), and (e) do not apply in an
106	106	emergency if all documents incorporated by reference are provided
107	107	simultaneously with the contract prior to execution. For purposes
108	108	of this subsection, "emergency" means a sudden, urgent occurrence
109	109	that requires immediate action.
110	110	(i) An owner, original contractor, or subcontractor may
111	111	provide a copy of an incorporated document to the other party to a
112	112	construction contract under Subsection (c), (d), or (e) by
113	113	providing a link to the document on an Internet website or file
114	114	hosting service that may be accessed by the other party free of
115	115	charge for the duration of the term of the contract. The version of
116	116	the incorporated document that is accessible on the date the party
117	117	receives the information necessary to access the document is the
118	118	version of the document that is incorporated into the contract.
119	119	SECTION 4. Chapter 272, Business & Commerce Code, is
120	120	amended by adding Section 272.003 to read as follows:
121	121	Sec. 272.003. WAIVER OF CHAPTER PROHIBITED. A person may
122	122	not waive this chapter, including a provision of this chapter, by
123	123	contract or other means. A purported waiver of this chapter is
124	124	against public policy and is void.
125	125	SECTION 5. The changes in law made by this Act apply only to
126	126	a contract that is entered into or renewed on or after the effective
127	127	date of this Act.
128	128	SECTION 6. This Act takes effect September 1, 2025.