Texas Business and Commerce Code
Sec. § 1.301
Territorial Application of the Title; Parties’ Power to Choose Applicable Law


Except as provided hereafter in this section, when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties. Failing such agreement this title applies to transactions bearing an appropriate relation to this state.


Where one of the following provisions of this title specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law (including the conflict of laws rules) so specified:
Rights of creditors against sold goods. Section 2.402 (Rights of Seller’s Creditors Against Sold Goods).
Applicability of the chapter on Leases. Sections 2A.105 (Territorial Application of Chapter to Goods Covered by Certificate of Title) and 2A.106 (Limitation on Power of Parties to Consumer Lease to Choose Applicable Law and Judicial Forum).
Applicability of the chapter on Bank Deposits and Collections. Section 4.102 (Applicability).
Governing law in the chapter on Funds Transfers. Section 4A.507 (Choice of Law).
Letters of Credit. Section 5.116 (Choice of Law and Forum).
Applicability of the chapter on Investment Securities. Section 8.110 (Applicability; Choice of Law).
Law governing perfection, the effect of perfection or nonperfection, and the priority of security interests and agricultural liens. Sections 9.301-9.307.


If a transaction that is subject to this title is a “qualified transaction,” as defined in Section 271.001 (Definition), then except as provided in Subsection (b) of this section, Chapter 271 (Rights of Parties to Choose Law Applicable) governs the effect of an agreement by the parties that the law of a particular jurisdiction governs an issue relating to the transaction or that the law of a particular jurisdiction governs the interpretation or construction of an agreement relating to the transaction or a provision of the agreement.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 2.02, eff. April 1, 2009.
Last accessed
Oct. 14, 2020