HBA-ATS, DMD H.B. 2653 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2653
By: Elkins
Business & Industry
6/8/1999
Enrolled

 
BACKGROUND AND PURPOSE 

Prior to the 76th Legislature, transactions conducted over the Internet
between persons located in Texas and businesses located out of state were
not subject to Texas law.  H.B. 2653 provides that a contract made over the
Internet, between a person in this state and a person outside this state,
is governed by the law of this state unless the party in this state is
given notice that the law of the state where the other party is located
applies to the contract and agrees to the application of that law. This
bill sets out provisions that do not apply to this type of contract. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter D, Chapter 35, Business & Commerce Code, by
adding Section 35.531, as follows: 

Sec. 35.531.  LAW APPLICABLE TO CONTRACT MADE OVER INTERNET. (a) Defines
"Internet."  

(b) Provides that, subject to Subsection (e), this section applies only to
a contract made solely over  the Internet between a person located in this
state and a person located outside this state who does not maintain an
office or agent in this state for doing business in this state.  

(c) Provides that a contract to which this section applies is governed by
the law of this state unless each party to the contract who is located in
this state is given notice that the law of the state in which another party
to the contract is located applies to the contract, and agrees to the
application of that state's law.  

(d) Provides that a person asserting that the law of another state applies
to a contract has the burden of proving that notice was given and agreement
was obtained as provided by Subsection (c).  

(e) Provides that Sections 1.105 (Territorial Application of the Title;
Parties' Power to Choose Applicable Law) and 35.53 (Notice of Law; Dispute
Resolution Forum Applicable to Contract), Business & Commerce Code, do not
apply to a contract to which this section applies. Provides that this
section does not apply to a contract to which Section 35.51 (Rights of
Parties to Choose Law Applicable to Certain Transactions), Business &
Commerce Code, applies.  

SECTION 2.Sets forth that this Act applies only to a contract made on or
after the effective date of this Act.    

SECTION 3.Effective date: September 1, 1999. 

SECTION 4.Emergency clause.