12-02-2013 | Legal News

New Construction Contract Rules Take Effect January 1, 2014

By: Brian Rickert

During the 2013 legislative session, Iowa House File 211 was passed and signed into law changing the way certain provisions in Iowa construction contracts will be governed.  Starting on January 1, 2014, all provisions in an Iowa construction contract that require application of another state’s laws (one other than Iowa) will be held void and unenforceable.  These sorts of clauses are routinely referred to as choice of law provisions.  Similarly, a provision in a construction contract that requires litigation, arbitration, mediation or some other sort of dispute resolution process to take place in another state (one other than Iowa) will also be held void and unenforceable.  These sorts of provisions are commonly referred to a venue provisions.  This law was passed to try to remedy certain inequities that were believed to exist, and to make clear that Iowa law will govern contracts on Iowa construction projects, disputes arising from those projects, and those disputes will be settled in an Iowa forum.  The new code section will be found at Iowa Code Chapter 537A.6.  If you have any questions about the new law or its impact on your business, please call BrownWinick attorney Brian Rickert at 515-242-2457.