Sec. 56.051. ENFORCEMENT OF CLAUSE PROHIBITED TO EXTENT CERTAIN CONTRACTUAL OBLIGATIONS NOT MET. A contingent payor or its surety may not enforce a contingent payment clause to the extent that the obligor's nonpayment to the contingent payor is the result of the contractual obligations of the contingent payor not being met, unless the nonpayment is the result of the contingent payee's failure to meet the contingent payee's contractual requirements.
Added by Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969), Sec. 4.001(a), eff. September 1, 2009.
Structure Texas Statutes
Title 4 - Business Opportunities and Agreements
Chapter 56 - Agreement for Payment of Construction Subcontractor
Subchapter B. Contingent Payment Clause
Section 56.051. Enforcement of Clause Prohibited to Extent Certain Contractual Obligations Not Met
Section 56.052. Enforcement of Clause Prohibited Following Notice From Contingent Payee
Section 56.053. Enforcement of Clause Prohibited if Existence of Sham Relationship
Section 56.054. Enforcement of Clause Prohibited if Unconscionable