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AB-1051 Jurisdiction and forum: construction contracts.(1991-1992)

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Assembly Bill No. 1051
CHAPTER 582

An act to add Section 410.42 to the Code of Civil Procedure, relating to contracts.

[ Filed with Secretary of State  October 07, 1991. Approved by Governor  October 05, 1991. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 1051, Eastin. Jurisdiction and forum: construction contracts.
Under existing law, the courts of this state may exercise jurisdiction on any basis not inconsistent with the California or United States Constitution, but a court is authorized to stay or dismiss an action that it finds in the interest of substantial justice should be heard in a forum outside the state.
This bill would make void and unenforceable provisions in specified construction subcontracts to be performed in this state by a subcontractor with principal offices in this state and which purport to require the dispute to be litigated or determined outside this state or which purport to preclude a party from litigating or otherwise obtaining resolution of the dispute in this state.

The people of the State of California do enact as follows:


SECTION 1.

 Section 410.42 is added to the Code of Civil Procedure, to read:

410.42.
 The following provisions of a contract between the contractor and a subcontractor with principal offices in this state, for the construction of a public or private work of improvement in this state, shall be void and unenforceable:
(a)  A provision which purports to require any dispute between the parties to be litigated, arbitrated, or otherwise determined outside this state.
(b)  A provision which purports to preclude a party from commencing such a proceeding or obtaining a judgment or other resolution in this state or the courts of this state.
For purposes of this section, “construction” means any work or services performed on, or materials provided for, a work of improvement, as defined in Section 3106 of the Civil Code, and for which a lien may be claimed pursuant to Section 3110 of the Civil Code (whether or not a lien is in fact claimed) or for which such a lien could be claimed but for Section 3109.