As Reported by the Senate Judiciary Committee 1
123rd General Assembly 4
Regular Session Sub. 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-WILLIAMS-VERICH-DISTEL-KRUPINSKI- 10
HARRIS-D. MILLER-BUCHY-PERRY-YOUNG-OGG-STEVENS-JOLIVETTE- 11
JACOBSON-VESPER-WIDENER-SENATOR CUPP 12
_________________________________________________________________ 14
A B I L L
To amend section 4113.62 of the Revised Code to 16
specify that a construction contract containing a 17
provision subjecting the contract to the laws of
another state is void. 18
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 20
Section 1. That section 4113.62 of the Revised Code be 22
amended to read as follows: 23
Sec. 4113.62. (A) Any provision of a construction 33
contract, agreement, or understanding that waives rights under a 34
surety bond is void and unenforceable as against public policy. 35
(B) Any provision of a construction contract, agreement, 38
or understanding, or specification or other documentation that is 39
made a part of a construction contract, agreement, or 40
understanding, that waives any pending or asserted claim on the 41
basis of final payment made from one person to another for the 42
construction contract, agreement, or understanding, is void and 43
unenforceable as against public policy, when the person against 44
whom the claim is pending or asserted has received notice of that 45
pending or asserted claim. Nothing in this division precludes 46
parties to a construction contract, agreement, or understanding 47
from entering into a subsequent settlement agreement arising from 48
a claim under that construction contract, agreement, or 49
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understanding.
(C)(1) Any provision of a construction contract, 52
agreement, or understanding, or specification or other 53
documentation that is made a part of a construction contract, 54
agreement, or understanding, that waives or precludes liability 55
for delay during the course of a construction contract when the 56
cause of the delay is a proximate result of the owner's act or 57
failure to act, or that waives any other remedy for a 58
construction contract when the cause of the delay is a proximate
result of the owner's act or failure to act, is void and 59
unenforceable as against public policy. 60
(2) Any provision of a construction subcontract, 62
agreement, or understanding, or specification or other 63
documentation that is made part of a construction subcontract, 64
agreement, or understanding, that waives or precludes liability 65
for delay during the course of a construction subcontract when 66
the cause of the delay is a proximate result of the owner's or 67
contractor's act or failure to act, or that waives any other
remedy for a construction subcontract when the cause of the delay 68
is a proximate result of the owner's or contractor's act or 69
failure to act, is void and unenforceable as against public 70
policy.
(D)(1) ANY PROVISION OF A CONSTRUCTION CONTRACT, 72
AGREEMENT, UNDERSTANDING, OR SPECIFICATION OR OTHER DOCUMENT OR 73
DOCUMENTATION THAT IS MADE A PART OF A CONSTRUCTION CONTRACT, 75
SUBCONTRACT, AGREEMENT, OR UNDERSTANDING FOR AN IMPROVEMENT, OR
PORTION THEREOF, TO REAL ESTATE IN THIS STATE THAT MAKES THE 77
CONSTRUCTION CONTRACT OR SUBCONTRACT, AGREEMENT, OR OTHER 78
UNDERSTANDING SUBJECT TO THE LAWS OF ANOTHER STATE IS VOID AND 80
UNENFORCEABLE AS AGAINST PUBLIC POLICY. 81
(2) ANY PROVISION OF A CONSTRUCTION CONTRACT, AGREEMENT, 83
UNDERSTANDING, SPECIFICATION, OR OTHER DOCUMENT OR DOCUMENTATION 84
THAT IS MADE A PART OF A CONSTRUCTION CONTRACT, SUBCONTRACT, 85
AGREEMENT, OR UNDERSTANDING FOR AN IMPROVEMENT, OR PORTION 86
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THEREOF, TO REAL ESTATE IN THIS STATE THAT REQUIRES ANY 87
LITIGATION, ARBITRATION, OR OTHER DISPUTE RESOLUTION PROCESS 88
PROVIDED FOR IN THE CONSTRUCTION CONTRACT, SUBCONTRACT, 89
AGREEMENT, OR UNDERSTANDING TO OCCUR IN ANOTHER STATE IS VOID AND 90
UNENFORCEABLE AS AGAINST PUBLIC POLICY. ANY LITIGATION, 91
ARBITRATION, OR OTHER DISPUTE RESOLUTION PROCESS PROVIDED FOR IN 92
THE CONSTRUCTION CONTRACT, SUBCONTRACT, AGREEMENT, OR 93
UNDERSTANDING SHALL TAKE PLACE IN THE COUNTY OR COUNTIES IN WHICH 94
THE IMPROVEMENT TO REAL ESTATE IS LOCATED OR AT ANOTHER LOCATION 95
WITHIN THIS STATE MUTUALLY AGREED UPON BY THE PARTIES.
(3) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO APPLY TO 97
ANY PROMISSORY NOTE, LOAN AGREEMENT, MORTGAGE, SECURITY 98
AGREEMENT, ASSIGNMENT OF RENTS, OR ANY OTHER CONTRACT, AGREEMENT, 99
UNDERSTANDING, OR OTHER DOCUMENT OR DOCUMENTATION TO WHICH A 100
FINANCIAL INSTITUTION, AS DEFINED IN SECTION 5725.01 OF THE 102
REVISED CODE, OR ANY AFFILIATE, AS DEFINED IN DIVISION (A)(1) OF 103
SECTION 1109.53 OF THE REVISED CODE, IS A PARTY. 104
(E) No construction contract, agreement, or understanding 107
that makes payment from a contractor to a subcontractor or 108
materials supplier, or from a subcontractor to a materials 109
supplier, lower tier subcontractor, or lower tier materials 110
supplier contingent or conditioned upon receipt of payment from 111
any other person shall prohibit a person from filing a claim to
protect rights under sections 153.56, 1311.06, and 1311.26 of the 113
Revised Code from expiring during the pendency of receipt of 116
payment.
(E)(F) Nothing in this section shall be construed to 118
create a liability for a surety on a bond that is greater than 120
that of its principal, or limit the availability to a surety of 121
any defenses available to its principal.
(F)(G) As used in this section: 124
(1) "Contractor" and "lower tier subcontractor" have the 127
same meanings as in section 4113.61 of the Revised Code. 130
(2) "Materials supplier" includes any person by whom any 132
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materials are furnished in furtherance of an improvement. 133
(3) "Lower tier materials supplier" means a materials 135
supplier who is not in privity of contract with a contractor but 136
is in privity of contract with another subcontractor or a 137
materials supplier.
(4) "Subcontractor," "improvement," and "materials" have 139
the same meanings as in section 1311.01 of the Revised Code. 140
(5) "CONSTRUCTION CONTRACT" MEANS A CONTRACT OR AGREEMENT 142
FOR THE DESIGN, PLANNING, CONSTRUCTION, ALTERATION, REPAIR, 143
MAINTENANCE, MOVING, DEMOLITION, OR EXCAVATION OF A BUILDING, 144
STRUCTURE, HIGHWAY, ROAD, APPURTENANCE, OR APPLIANCE SITUATED ON 145
REAL ESTATE LOCATED IN THIS STATE. 146
Section 2. That existing section 4113.62 of the Revised 148
Code is hereby repealed. 149