§2196. Public contracts; certain provisions invalid

A. The legislature finds that, with respect to public contracts involving the state or a political subdivision of the state, when the work is to be done in this state, or the services are to be provided or the materials are to be supplied in this state, provisions in such agreements requiring disputes arising thereunder to be resolved in a forum outside of this state or requiring their interpretation to be governed by the laws of another jurisdiction are inequitable and against the public policy of this state.

B. The legislature hereby declares null and void and unenforceable as against public policy any provision in a public contract, as described in Subsection A, which requires either of the following:

(1) That a suit or arbitration proceeding must be brought in a forum or jurisdiction outside of this state, instead of being pursued in accordance with the laws of this state governing such actions.

(2) That the agreement must be interpreted according to the laws of another jurisdiction.

C. The provisions of this Section apply to public contracts, as described in Subsection A, entered into on or after June 5, 1992.

D. The governing authority of the state or a political subdivision may waive the prohibition of enforceability provision of this Section and comply with such contractual provisions upon a determination that to do so would be in the best interest of the state or political subdivision.

Acts 1992, No. 75, §1, eff. June 5, 1992.