Bill Text: TX HB2657 | 2023-2024 | 88th Legislature | Comm Sub


Bill Title: Relating to voidable provisions contained in certain construction contracts.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2023-05-09 - Committee report sent to Calendars [HB2657 Detail]

Download: Texas-2023-HB2657-Comm_Sub.html
  88R23274 SHH-D
 
  By: Leach H.B. No. 2657
 
  Substitute the following for H.B. No. 2657:
 
  By:  Isaac C.S.H.B. No. 2657
 
 
 
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), and (h) to
  read as follows:
         (c)  Except as provided by Subsection (g), 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 Subsection (g), 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 Subsection (g), 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.
         (h)  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 void
  as against public policy.
         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, 2023.
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