As Introduced                            1            

123rd General Assembly                                             4            

   Regular Session                                H. B. No. 491    5            

      1999-2000                                                    6            


       REPRESENTATIVES WILLAMOWSKI-NETZLEY-TAYLOR-SCHULER-         8            

       TERWILLEGER-TIBERI-VAN VYVEN-WINKLER-CORBIN-EVANS-          9            

                    HOLLISTER-ROMAN-HARTNETT                       10           


_________________________________________________________________   11           

                          A   B I L L                                           

             To amend section 4113.62 of the Revised Code to       13           

                specify that a construction contract containing a  14           

                provision subjecting the contract to the laws of                

                another state is void.                             15           




BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:        17           

      Section 1.  That section 4113.62 of the Revised Code be      19           

amended to read as follows:                                        20           

      Sec. 4113.62.  (A)  Any provision of a construction          30           

contract, agreement, or understanding that waives rights under a   31           

surety bond is void and unenforceable as against public policy.    32           

      (B)  Any provision of a construction contract, agreement,    35           

or understanding, or specification or other documentation that is  36           

made a part of a construction contract, agreement, or              37           

understanding, that waives any pending or asserted claim on the    38           

basis of final payment made from one person to another for the     39           

construction contract, agreement, or understanding, is void and    40           

unenforceable as against public policy, when the person against    41           

whom the claim is pending or asserted has received notice of that  42           

pending or asserted claim.  Nothing in this division precludes     43           

parties to a construction contract, agreement, or understanding    44           

from entering into a subsequent settlement agreement arising from  45           

a claim under that construction contract, agreement, or            46           

understanding.                                                                  

      (C)(1)  Any provision of a construction contract,            49           

                                                          2      


                                                                 
agreement, or understanding, or specification or other             50           

documentation that is made a part of a construction contract,      51           

agreement, or understanding, that waives or precludes liability    52           

for delay during the course of a construction contract when the    53           

cause of the delay is a proximate result of the owner's act or     54           

failure to act, or that waives any other remedy for a              55           

construction contract when the cause of the delay is a proximate                

result of the owner's act or failure to act, is void and           56           

unenforceable as against public policy.                            57           

      (2)  Any provision of a construction subcontract,            59           

agreement, or understanding, or specification or other             60           

documentation that is made part of a construction subcontract,     61           

agreement, or understanding, that waives or precludes liability    62           

for delay during the course of a construction subcontract when     63           

the cause of the delay is a proximate result of the owner's or     64           

contractor's act or failure to act, or that waives any other                    

remedy for a construction subcontract when the cause of the delay  65           

is a proximate result of the owner's or contractor's act or        66           

failure to act, is void and unenforceable as against public        67           

policy.                                                                         

      (D)  ANY PROVISION OF A CONSTRUCTION CONTRACT, AGREEMENT,    69           

OR UNDERSTANDING, OR SPECIFICATION OR OTHER DOCUMENTATION THAT IS  70           

MADE A PART OF A CONSTRUCTION CONTRACT, AGREEMENT, OR              71           

UNDERSTANDING, FOR AN IMPROVEMENT TO REAL ESTATE IN THIS STATE     72           

THAT MAKES THE CONSTRUCTION CONTRACT SUBJECT TO THE LAWS OF                     

ANOTHER STATE OR THAT REQUIRES THAT ANY LITIGATION, ARBITRATION,   73           

OR OTHER DISPUTE RESOLUTION PROCESS ON THE CONTRACT OCCUR IN       74           

ANOTHER STATE IS VOID AND UNENFORCEABLE AS AGAINST PUBLIC POLICY.  75           

      (E)  No construction contract, agreement, or understanding   78           

that makes payment from a contractor to a subcontractor or         79           

materials supplier, or from a subcontractor to a materials         80           

supplier, lower tier subcontractor, or lower tier materials        81           

supplier contingent or conditioned upon receipt of payment from    82           

any other person shall prohibit a person from filing a claim to                 

                                                          3      


                                                                 
protect rights under sections 153.56, 1311.06, and 1311.26 of the  84           

Revised Code from expiring during the pendency of receipt of       87           

payment.                                                                        

      (E)(F)  Nothing in this section shall be construed to        89           

create a liability for a surety on a bond that is greater than     91           

that of its principal, or limit the availability to a surety of    92           

any defenses available to its principal.                                        

      (F)(G)  As used in this section:                             95           

      (1)  "Contractor" and "lower tier subcontractor" have the    98           

same meanings as in section 4113.61 of the Revised Code.           101          

      (2)  "Materials supplier" includes any person by whom any    103          

materials are furnished in furtherance of an improvement.          104          

      (3)  "Lower tier materials supplier" means a materials       106          

supplier who is not in privity of contract with a contractor but   107          

is in privity of contract with another subcontractor or a          108          

materials supplier.                                                             

      (4)  "Subcontractor," "improvement," and "materials" have    110          

the same meanings as in section 1311.01 of the Revised Code.       111          

      Section 2.  That existing section 4113.62 of the Revised     113          

Code is hereby repealed.                                           114