Texas Business & Commerce Code - Section 35.51. Rights Of Parties To Choose Law Applicable To Certain Transactions
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§ 35.51. RIGHTS OF PARTIES TO CHOOSE LAW APPLICABLE TO
CERTAIN TRANSACTIONS. (a) In this section:
(1) "Transaction" includes more than one
substantially similar or related transaction entered into
contemporaneously and having at least one common party.
(2) "Qualified transaction" means a transaction under
which a party:
(A) pays or receives, or is obligated to pay or
entitled to receive, consideration with an aggregate value of at
least $1,000,000; or
(B) lends, advances, borrows, or receives, or is
obligated to lend or advance or is entitled to borrow or receive,
funds or credit with an aggregate value of at least $1,000,000.
(b) Except as provided by Subsection (e) or (f) of this
section or Section 35.52 of this code, if the parties to a qualified
transaction agree in writing that the law of a particular
jurisdiction governs an issue relating to the transaction,
including the validity or enforceability of an agreement relating
to the transaction or a provision of the agreement, and the
transaction bears a reasonable relation to that jurisdiction, the
law, other than conflict of laws rules, of that jurisdiction
governs the issue regardless of whether the application of that law
is contrary to a fundamental or public policy of this state or of
any other jurisdiction.
(c) Except as provided by Subsection (f) of this section and
Section 35.52 of this code, 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, other than conflict of laws rules, of that
jurisdiction governs that issue regardless of whether the
transaction bears a reasonable relation to that jurisdiction.
(d) For purposes of this section, 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. 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 its place of
business or, if that party has more than one place of business, its
chief executive office or an office from which it 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 a
substantial part of its obligations relating to the transaction,
such as delivering payments, in that jurisdiction; or
(5) a substantial part of the negotiations relating to
the transaction, and the signing of an agreement relating to the
transaction by a party to the transaction, occurred in that
jurisdiction.
(e) Except as provided by Subsection (f) of this section or
Section 35.52 of this code, 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, other than conflict of laws
rules, of that jurisdiction but is valid or enforceable under the
law, other than conflict of laws rules, of the jurisdiction that has
the most significant relation to the transaction, the subject
matter of the transaction, and the parties, then:
(A) the law, other than conflict of laws rules,
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 that term; and
(B) the law, other than conflict of laws rules,
of the jurisdiction that the parties agree would govern the
validity or enforceability of that agreement or of that provision
governs the validity or enforceability of the other terms of that
agreement or provision.
(f) Subsections (b)-(e) of this section 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, the
nature of an interest in real property that is transferred or
created by a transaction, the method for foreclosure of a lien on
real property, the nature of an interest in real property that
results from foreclosure, or the manner and effect of recording or
failing to record evidence of a transaction that transfers or
creates an interest in real property;
(2) the validity of a marriage or an adoption, whether
a marriage has been terminated, or 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;
(3) whether an instrument is a will, the rights of
persons under a will, or the rights of persons in the absence of a
will; or
(4) 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.
(g) Subsections (b)-(e) of this section apply to the
determination of the law that governs an issue relating to a
transaction involving real property other than those specified in
Subsection (f)(1) of this section, 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.
Added by Acts 1993, 73rd Leg., ch. 570, § 13, eff. Sept. 1, 1993.
Section: 35.45 35.455 35.46 35.47 35.48 35.49 35.50 35.51 35.52 35.53 35.531 35.54 35.55 35.56 35.57
Last modified: August 10, 2007
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