HBA-MPM H.B. 2465 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2465
By: Corte
Business & Industry
4/20/2001
Introduced



BACKGROUND AND PURPOSE 

There are several methods of resolving a formal contract dispute such as
mediation, arbitration, and lawsuits.  An increasingly popular method of
resolving contract dispute is binding arbitration, which may be written
into a contract that is signed by all affected parties. Binding arbitration
requires that the parties give up the right to pursue litigation by
deferring to the decision of an arbitration board.  Clauses regarding
binding arbitration may be in small print in a contract, and some
individuals may not realize that by signing the contract they are giving up
the right to pursue a claim in court.  House Bill 2465 requires contracts
containing arbitration clauses to include a conspicuous notice advising the
signer that by signing the contract, the individual waives the right to a
jury or court trial. 

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. 

ANALYSIS

House Bill 2465 amends the Business & Commerce Code to authorize a seller
or lessor of goods or services to include a provision in a contract that
requires the purchaser, lessee, or any other person to submit to a binding
arbitration of a dispute or claim arising out of the contract only if the
seller or lessor also includes immediately before the signature line a
conspicuous notice that is boldfaced, capitalized, and underlined that
informs the purchaser, lessee, or other person that by signing the
contract, the signer agrees to have any dispute or claim decided by
arbitration and that the signer gives up the right to a jury or court
trial.  The bill sets forth the language of the notice. 

EFFECTIVE DATE

September 1, 2001.