CHAPTER 271. RIGHTS OF PARTIES TO CHOOSE LAW APPLICABLE TO CERTAIN TRANSACTIONS
BUSINESS AND COMMERCE CODE
TITLE 9. APPLICABILITY OF LAW TO COMMERCIAL TRANSACTIONS
CHAPTER 271. RIGHTS OF PARTIES TO CHOOSE LAW APPLICABLE
TO CERTAIN TRANSACTIONS
Sec. 271.001. DEFINITION. In this chapter, "qualified
transaction" means a transaction under which a party:
(1) pays or receives, or is obligated to pay or is entitled to
receive, consideration with an aggregate value of at least $1
million; or
(2) lends, advances, borrows, or receives, or is obligated to
lend or advance or is entitled to borrow or receive, money or
credit with an aggregate value of at least $1 million.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.002. SUBSTANTIALLY SIMILAR OR RELATED TRANSACTIONS.
For purposes of this chapter, two or more substantially similar
or related transactions are considered a single transaction if
the transactions:
(1) are entered into contemporaneously; and
(2) have at least one common party.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.003. CONFLICT-OF-LAWS RULES. For purposes of this
chapter, a reference to the law of a particular jurisdiction does
not include that jurisdiction's conflict-of-laws rules.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.004. DETERMINATION OF REASONABLE RELATION OF
TRANSACTION TO PARTICULAR JURISDICTION. (a) For purposes of
this chapter, a transaction bears a reasonable relation to a
particular jurisdiction if the transaction, the subject matter of
the transaction, or a party to the transaction is reasonably
related to that jurisdiction.
(b) A transaction bears a reasonable relation to a particular
jurisdiction if:
(1) a party to the transaction is a resident of that
jurisdiction;
(2) a party to the transaction has the party's place of business
or, if that party has more than one place of business, the
party's chief executive office or an office from which the party
conducts a substantial part of the negotiations relating to the
transaction, in that jurisdiction;
(3) all or part of the subject matter of the transaction is
located in that jurisdiction;
(4) a party to the transaction is required to perform in that
jurisdiction a substantial part of the party's obligations
relating to the transaction, such as delivering payments; or
(5) a substantial part of the negotiations relating to the
transaction occurred in that jurisdiction and an agreement
relating to the transaction was signed in that jurisdiction by a
party to the transaction.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.005. LAW GOVERNING ISSUE RELATING TO QUALIFIED
TRANSACTION. (a) Except as provided by Section 271.007,
271.008(b), 271.009, 271.010, or 271.011 or by Chapter 272, the
law of a particular jurisdiction governs an issue relating to a
qualified transaction if:
(1) the parties to the transaction agree in writing that the law
of that jurisdiction governs the issue, including the validity or
enforceability of an agreement relating to the transaction or a
provision of the agreement; and
(2) the transaction bears a reasonable relation to that
jurisdiction.
(b) The law of a particular jurisdiction governs an issue
described by this section regardless of whether the application
of that law is contrary to a fundamental or public policy of this
state or of any other jurisdiction.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.006. LAW GOVERNING INTERPRETATION OR CONSTRUCTION OF
AGREEMENT RELATING TO QUALIFIED TRANSACTION. Except as provided
by Section 271.008(b), 271.009, 271.010, or 271.011 and by
Chapter 272, if the parties to a qualified transaction agree in
writing that the law of a particular jurisdiction governs the
interpretation or construction of an agreement relating to the
transaction or a provision of the agreement, the law of that
jurisdiction governs that issue regardless of whether the
transaction bears a reasonable relation to that jurisdiction.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.007. LAW GOVERNING VALIDITY OR ENFORCEABILITY OF TERM
OF AGREEMENT RELATING TO QUALIFIED TRANSACTION. (a) Except as
provided by Section 271.008(b), 271.009, 271.010, or 271.011 or
by Chapter 272, this section applies if:
(1) the parties to a qualified transaction agree in writing that
the law of a particular jurisdiction governs the validity or
enforceability of an agreement relating to the transaction or a
provision of the agreement;
(2) the transaction bears a reasonable relation to that
jurisdiction; and
(3) a term of the agreement or of that provision is invalid or
unenforceable under the law of that jurisdiction but is valid or
enforceable under the law of the jurisdiction that has the most
significant relation to the transaction, the subject matter of
the transaction, and the parties.
(b) If this section applies:
(1) the law of the jurisdiction that has the most significant
relation to the transaction, the subject matter of the
transaction, and the parties governs the validity or
enforceability of a term described by Subsection (a)(3); and
(2) the law of the jurisdiction that the parties agree would
govern the validity or enforceability of the agreement or
provision governs the validity or enforceability of the other
terms of the agreement or provision.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.008. APPLICABILITY TO CERTAIN REAL PROPERTY
TRANSACTIONS; EXCEPTIONS. (a) Sections 271.004-271.007 apply to
the determination of the law that governs an issue relating to a
transaction involving real property other than a matter described
by Subsection (b), including the validity or enforceability of an
indebtedness incurred in consideration for the transfer of, or
the payment of which is secured by a lien on, real property.
(b) Sections 271.004-271.007 do not apply to the determination
of the law that governs:
(1) whether a transaction transfers or creates an interest in
real property for security purposes or otherwise;
(2) the nature of an interest in real property that is
transferred or created by a transaction;
(3) the method for foreclosure of a lien on real property;
(4) the nature of an interest in real property that results from
foreclosure; or
(5) the manner and effect of recording or failing to record
evidence of a transaction that transfers or creates an interest
in real property.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.009. EXCEPTION: MARRIAGE OR ADOPTION. Sections
271.004-271.007 do not apply to the determination of the law that
governs:
(1) the validity of a marriage or an adoption;
(2) whether a marriage has been terminated; or
(3) the effect of a marriage on property owned by a spouse at
the time of the marriage or acquired by either spouse during the
marriage.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.010. EXCEPTION: DECEDENT'S ESTATE. Sections
271.004-271.007 do not apply to the determination of the law that
governs:
(1) whether an instrument is a will;
(2) the rights of persons under a will; or
(3) the rights of persons in the absence of a will.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 271.011. EXCEPTION: OTHER STATUTE SPECIFYING GOVERNING
LAW. Sections 271.004-271.007 do not apply to the determination
of the law that governs an issue that another statute of this
state or a statute of the United States provides is governed by
the law of a particular jurisdiction.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.