Chapter 509

2006 -- H 8251

Enacted 07/07/06

A N A C T

RELATING TO COMMERCIAL LAW -- LAW APPLICABLE TO CONSTRUCTION CONTRACTS

Introduced By: Representatives Anguilla, and Lally

Date Introduced: June 15, 2006

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 6-34.1-1 of the General Laws in Chapter 6-34.1 entitled "Law

Applicable to Construction Contracts" is hereby amended to read as follows:

6-34.1-1. Law applicable to construction contracts. -- (a) If a contract is principally for

the construction or repair of improvements to real property located in Rhode Island and the

contract contains a provision that makes the contract or any conflict arising under it subject to the

law of another state, to litigation in the courts of another state, or to arbitration in another state,

that provision is voidable by the party that is obligated by the contract to perform the construction

or repair.

      (b) A contract is principally for the construction or repair of improvements to real

property located in Rhode Island if the contract obligates a party, as its principal obligation under

the contract, to provide labor, or labor and materials, for the construction or repair of

improvements to real property located in Rhode Island as a general contractor or subcontractor.

      (c) A contract is not principally for the construction or repair of improvements to real

property located in Rhode Island if:

      (1) The contract is a partnership agreement or other agreement governing an entity or

trust;

      (2) The contract provides for a loan or other extension of credit and the party promising

to construct or repair improvements does so as part of its agreements with the lender or other

extender of credit; or

      (3) The contract is for the management of real property or improvements and the

obligation to construct or repair is part of that management.

      (d) Subsections (b) and (c) of this section are not an exclusive list of situations in which

a contract is or is not principally for the construction or repair of improvements to real property

located in this state.

(e) The superior court of the state of Rhode Island shall have exclusive jurisdiction in

relation to the construing or enforceability of section 6-34.1-1.

     SECTION 2. This act shall take effect upon passage.

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LC03461

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