Construction disputes can be an absolute mess. When a construction dispute emerges, construction professionals must navigate a complex web of conflicting federal, state, and local laws. This web only becomes more complicated when disputes are subject to the laws of another state. Fortunately, Texas is one of 24 states that limit the validity of forum-selection clauses, clauses that stipulate where disputes are to be resolved.
Below, we discuss the Texas law as it pertains to forum-selection clauses. If your dispute involves public interests in Texas, rest assured that it can be resolved here in Texas. For a legal ally who will fight to resolve your dispute, consult a Houston construction lawyer from Cotney Law.
The Validity of Forum-Selection Clauses
In 2013, the U.S. Supreme Court reaffirmed that forum-selection clauses are presumptively enforceable in its decision in Atlantic Marine Construction Co. v. United States District Court for the Western District of Texas. (We know this sounds a little contradictory but hear us out). In this case, Atlantic Marine asked the federal court to uphold a forum-selection clause that required disputes to be resolved in Virginia. Their request was denied. The court found that forum-selection clauses “should be given controlling weight in all but the most exceptional cases” and that courts should only consider public interests, not private interests, when making a decision. Public interests include laws that limit forum-selection clauses like those in Texas.
Texas Business and Commerce Code § 272.001 stipulates:
If a construction contract or an agreement collateral to or affecting the construction contract contains a provision making the contract or agreement or any conflict arising under the contract or agreement subject to another state’s law, litigation in the courts of another state, or arbitration in another state, that provision is voidable by a party obligated by the contract or agreement to perform the work that is the subject of the construction contract.
What does this all mean? Essentially, the courts will consider state law when deciding whether or not a forum-selection clause is enforceable. Texas law states that forum-selection clauses are voidable. There are exceptions, but if a dispute relating to a Texas project emerges, you can generally insist that the dispute be resolved in Texas.
Resolving a Dispute on Your Terms
Ensuring the venue of your construction dispute is only a small victory on the road to a satisfactory resolution. Winning the battle will require a dedicated legal team familiar with Texas Law. At Cotney Law, our Houston construction dispute lawyers are not only adept at navigating the Texas legal system but also capable of resolving disputes either through alternative dispute resolution (ADR) or litigation. If you want to resolve your dispute on your terms, contact the experienced legal team at Cotney Law today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.