HB2960

HB2960 makes specified out-of-state law and dispute-location clauses in covered construction contracts void as against public policy, rather than merely giving a party performing the work an option to invalidate them. The retained scope is construction contracts concerning real property in Texas; the rule also covers agreements collateral to or affecting those contracts. It invalidates the specified clause, not the entire construction contract. Final law, Sections 1–2; Business & Commerce Code Section 272.001.

The affected clauses make the contract, related agreement or a dispute under it subject to another state’s law, litigation in another state’s courts, or arbitration in another state. Where a contractual venue clause—the clause choosing where a case will be heard—is void under this rule, an action arising from the contract must be brought in Texas in the county containing the property at issue, unless the parties agree to another venue after the dispute arises. This is not a blanket ban on arbitration or a rule invalidating every agreement to use another Texas county.

The act also updates the related exception in the state’s major-transaction venue statute from “voidable” to “void.” It does not change that statute’s definition of a major transaction or create a new dollar threshold for the construction-contract rule. Civil Practice and Remedies Code Section 15.020.

The changes apply only to contracts entered into or renewed on or after September 1, 2025, the act’s effective date. Earlier contracts that have not been renewed are not automatically brought under the new rule. The governor signed June 20, 2025. Official history.