Texas Business & Commerce Code

§ 56.052 — ENFORCEMENT OF CLAUSE PROHIBITED FOLLOWING NOTICE FROM CONTINGENT PAYEE

BC § 56.052Title 4. BUSINESS OPPORTUNITIES AND AGREEMENTS · Ch. 56. AGREEMENT FOR PAYMENT OF CONSTRUCTION SUBCONTRACTOR · Art. B. CONTINGENT PAYMENT CLAUSE

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(a)Except as provided by Subsection (d), a contingent payor or its surety may not enforce a contingent payment clause as to work performed or materials delivered after the contingent payor receives written notice from the contingent payee objecting to the further enforceability of the contingent payment clause as provided by this chapter and the notice becomes effective as provided by Subsection (b). The contingent payee may send written notice only after the 45th day after the date the contingent payee submits a written request for payment to the contingent payor that is in a form substantially in accordance with the contingent payee's contract requirements for the contents of a regular progress payment request or an invoice.

(b)For purposes of Subsection (a), the written notice becomes effective on the latest of:

(1)the 10th day after the date the contingent payor receives the notice;

(2)the eighth day after the date interest begins to accrue against the obligor under:

(A)Section 28.004, Property Code, under a contract for a private project governed by Chapter 28, Property Code; or

(B)31 U.S.C. Section 3903(a)(6), under a contract for a public project governed by 40 U.S.C. Section 3131; or

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Legislative history

Added by Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969), Sec. 4.001(a), eff. September 1, 2009.