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.