Committee backs correction to construction law after court ruling on venue and choice‑of‑law

Chairman Hughes told the committee House Bill 2960 would amend the Business and Commerce Code to restore long‑standing protections preventing construction contracts from forcing Texas contractors to litigate disputes in out‑of‑state forums or under foreign law.

Hughes said a 2023 Court of Appeals decision had held such protections could be waived, which “created real problems in the construction industry and placed Texas contractors at a disadvantage in contract negotiations.” The bill would, according to the sponsor, make three principal changes: change the statutory remedy from making such clauses voidable to making them void as against public policy; require disputes arising from construction contracts to be litigated in the Texas county where the construction project is located; and align venue rules with lien‑filing requirements.

Jennifer Fagan, testifying for the Texas Construction Association, said her group represents about “3,000 subcontractors across the state” and supports HB 2960 as a correction of a court misstep. She described a concern that an owner’s out‑of‑state venue clause could be held to waive rights for downstream subcontractors because the prime contract is incorporated into subcontracts.

William (Bill) Irwin, a board‑certified construction lawyer and registered architect, told senators the bill would reduce complexity created by the Court of Appeals decision and would simplify enforcement of lien laws and related procedures.

The committee opened and closed public testimony, heard from the two witnesses above, and left the bill pending for further consideration; no amendments or votes were recorded at the hearing.

The bill’s sponsors framed HB 2960 as restoring decades of Texas law favoring local venue and protecting smaller contractors that lack the resources to litigate in distant jurisdictions.