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As Reported by the Senate Judiciary Committee
123rd General Assembly
Regular Session
1999-2000 | Sub. H. B. No. 491 |
REPRESENTATIVES WILLAMOWSKI-NETZLEY-TAYLOR-SCHULER-
TERWILLEGER-TIBERI-VAN VYVEN-WINKLER-CORBIN-EVANS-
HOLLISTER-ROMAN-HARTNETT-WILLIAMS-VERICH-DISTEL-KRUPINSKI-
HARRIS-D. MILLER-BUCHY-PERRY-YOUNG-OGG-STEVENS-JOLIVETTE-
JACOBSON-VESPER-WIDENER-
SENATOR CUPP
A BILL
To amend section 4113.62 of the Revised Code to specify that a construction
contract containing a provision subjecting the contract to the laws of another
state is void.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 4113.62 of the Revised Code be amended to read as
follows:
Sec. 4113.62. (A) Any
provision of a construction contract, agreement, or
understanding that waives rights under a surety bond is void and
unenforceable as against public policy.
(B) Any provision of a
construction contract, agreement, or understanding, or
specification or other documentation that is made a part of a
construction contract, agreement, or understanding, that waives
any pending or asserted claim on the basis of final payment made
from one person to another for the construction contract,
agreement, or understanding, is void and unenforceable as
against public policy, when the person against whom the claim is
pending or asserted has received notice of that pending or
asserted claim. Nothing in this division precludes parties to a construction
contract, agreement, or understanding from entering into a subsequent
settlement agreement arising from a claim under that construction contract,
agreement, or understanding.
(C)(1) Any provision of a
construction contract, agreement, or understanding, or
specification or other documentation that is made a part of a
construction contract, agreement, or understanding, that waives
or precludes liability for delay during the course of a
construction contract when the cause of the delay is a proximate result of the
owner's act or failure to act, or that waives any other remedy
for a construction contract when the cause of the delay is a proximate result
of the owner's act or failure to act, is void and unenforceable
as against public policy.
(2) Any provision of a construction subcontract, agreement, or
understanding, or specification or other documentation that is made part of a
construction subcontract, agreement, or understanding, that waives or
precludes liability for delay during the course of a construction subcontract
when the cause of the delay is a proximate result of the
owner's or contractor's act or failure to act, or that waives any other remedy
for a construction subcontract when the cause of the delay is a proximate
result of the owner's or contractor's act or failure to act, is void and
unenforceable as against public policy.
(D)(1) ANY PROVISION OF A CONSTRUCTION CONTRACT, AGREEMENT, UNDERSTANDING,
OR SPECIFICATION OR OTHER DOCUMENT OR DOCUMENTATION THAT IS MADE A PART OF A
CONSTRUCTION
CONTRACT, SUBCONTRACT, AGREEMENT, OR UNDERSTANDING FOR AN IMPROVEMENT, OR
PORTION THEREOF, TO REAL ESTATE IN
THIS STATE THAT MAKES THE CONSTRUCTION CONTRACT OR SUBCONTRACT, AGREEMENT, OR
OTHER UNDERSTANDING SUBJECT TO THE LAWS OF ANOTHER
STATE
IS VOID AND
UNENFORCEABLE AS AGAINST PUBLIC POLICY.
(2) ANY PROVISION OF A CONSTRUCTION CONTRACT, AGREEMENT,
UNDERSTANDING, SPECIFICATION, OR OTHER DOCUMENT OR DOCUMENTATION THAT IS
MADE A PART OF A CONSTRUCTION CONTRACT, SUBCONTRACT, AGREEMENT, OR
UNDERSTANDING FOR AN IMPROVEMENT, OR PORTION THEREOF, TO REAL
ESTATE IN THIS STATE THAT REQUIRES ANY LITIGATION, ARBITRATION, OR
OTHER DISPUTE RESOLUTION PROCESS PROVIDED FOR IN THE CONSTRUCTION
CONTRACT, SUBCONTRACT, AGREEMENT, OR UNDERSTANDING TO OCCUR IN
ANOTHER STATE IS VOID AND UNENFORCEABLE AS AGAINST PUBLIC POLICY.
ANY LITIGATION, ARBITRATION, OR OTHER DISPUTE RESOLUTION PROCESS
PROVIDED FOR IN THE CONSTRUCTION CONTRACT, SUBCONTRACT, AGREEMENT,
OR UNDERSTANDING SHALL TAKE PLACE IN THE COUNTY OR COUNTIES IN
WHICH THE IMPROVEMENT TO REAL ESTATE IS LOCATED OR AT ANOTHER
LOCATION WITHIN THIS STATE MUTUALLY AGREED UPON BY THE PARTIES.
(3) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO APPLY TO ANY
PROMISSORY NOTE, LOAN AGREEMENT, MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF RENTS, OR ANY OTHER CONTRACT, AGREEMENT,
UNDERSTANDING, OR OTHER DOCUMENT OR DOCUMENTATION TO WHICH A
FINANCIAL INSTITUTION, AS DEFINED IN SECTION 5725.01 OF THE
REVISED CODE, OR ANY AFFILIATE, AS DEFINED IN DIVISION
(A)(1) OF SECTION
1109.53 OF THE REVISED CODE, IS A PARTY.
(E) No construction contract, agreement, or
understanding that makes payment from a contractor to a
subcontractor or materials supplier, or from a subcontractor to a
materials supplier, lower tier subcontractor, or lower tier
materials supplier contingent or conditioned upon receipt of
payment from 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
Revised
Code from expiring during the
pendency of receipt of payment.
(E)(F) Nothing in this section shall be construed to create a
liability for a surety on a bond that is
greater than that of its principal, or limit the availability to
a surety of any defenses available to its principal.
(F)(G) As used in this
section:
(1) "Contractor" and "lower
tier subcontractor" have the same
meanings as in section 4113.61 of the
Revised
Code.
(2) "Materials supplier" includes any person by whom any materials are
furnished in furtherance of an improvement.
(3) "Lower tier materials supplier" means a materials supplier who is not
in privity of contract with a contractor but is in privity of contract with
another subcontractor or a materials supplier.
(4) "Subcontractor," "improvement," and "materials" have the same meanings
as in section 1311.01 of the Revised Code.
(5) "CONSTRUCTION CONTRACT" MEANS A CONTRACT OR AGREEMENT FOR
THE DESIGN, PLANNING, CONSTRUCTION, ALTERATION, REPAIR,
MAINTENANCE, MOVING, DEMOLITION, OR EXCAVATION OF A BUILDING,
STRUCTURE, HIGHWAY, ROAD, APPURTENANCE, OR APPLIANCE SITUATED ON
REAL ESTATE LOCATED IN THIS STATE.
Section 2. That existing section 4113.62 of the Revised Code is hereby
repealed.
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