2023 Texas Statutes › Business and Commerce Code › Title 9 - Applicability of Law to Commercial Transactions › Chapter 271 - Rights of Parties to Choose Law Applicable to Certain Transactions › Section 271.004. Determination of Reasonable Relation of Transaction to Particular Jurisdiction

Sec. 271.004.  DETERMINATION OF REASONABLE RELATION OF TRANSACTION TO PARTICULAR JURISDICTION.  (a)  For purposes of this chapter, a transaction bears a reasonable relation to a particular jurisdiction if the transaction, the subject matter of the transaction, or a party to the transaction is reasonably related to that jurisdiction.
(b)  A transaction bearing a reasonable relation to a particular jurisdiction includes:
(1)  a transaction in which:
(A)  a party to the transaction is a resident of that jurisdiction;
(B)  a party to the transaction has the party's place of business or, if that party has more than one place of business, the party's chief executive office or an office from which the party conducts a substantial part of the negotiations relating to the transaction, in that jurisdiction;
(C)  all or part of the subject matter of the transaction is located in that jurisdiction;
(D)  a party to the transaction is required to perform in that jurisdiction a substantial part of the party's obligations relating to the transaction, such as delivering payments;
(E)  a substantial part of the negotiations relating to the transaction occurred in or from that jurisdiction and an agreement relating to the transaction was signed in that jurisdiction by a party to the transaction; or
(F)  all or part of the subject matter of the transaction is related to the governing documents or internal affairs of an entity formed under the laws of that jurisdiction, such as:
(i)  an agreement among members or owners of the entity, an agreement or option to acquire a membership or ownership interest in the entity, and the conversion of debt or other securities into an ownership interest in the entity; and
(ii)  any other matter relating to rights or obligations with respect to the entity's membership or ownership interests; and
(2)  a transaction in which:
(A)  all or part of the subject matter of the transaction is a loan or other extension of credit in which a party lends, advances, borrows, or receives, or is obligated to lend or advance or entitled to borrow or receive, money or credit with an aggregate value of at least $25 million;
(B)  at least three financial institutions or other lenders or providers of credit are parties to the transaction;
(C)  the particular jurisdiction is in the United States; and
(D)  a party to the transaction has more than one place of business and has an office in that particular jurisdiction.
(c)  If a transaction bears a reasonable relation to a particular jurisdiction at the time the parties enter into the transaction, the transaction shall continue to bear a reasonable relation to that jurisdiction regardless of:
(1)  any subsequent change in facts or circumstances with respect to the transaction, the subject matter of the transaction, or any party to the transaction; or
(2)  any modification, amendment, renewal, extension, or restatement of any agreement relating to the transaction.
Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 2.01, eff. April 1, 2009.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 132 (H.B. 2991), Sec. 1, eff. September 1, 2011.