Provides relative to construction contracts

LEGAL ANALYSIS — HB 170 (2026 Regular Session) Amending and Reenacting R.S. 9:2779 Author: Representative Neil Riser and Senator Cathey Subject: Construction Contracts — Definition and Technical Changes

Statutory Context:

The sole statutory provision amended by this bill is R.S. 9:2779, located in Title 9 (Civil Code — Ancillaries) of the Louisiana Revised Statutes. The statute currently bears the heading "Construction contracts, subcontracts, and purchase orders; certain provisions invalid" and is situated within the broader contractual and private law framework of Title 9. In its current form, R.S. 9:2779 represents a Louisiana public policy declaration and enforcement mechanism addressing choice-of-forum and choice-of-law clauses in construction contracts touching Louisiana. The legislature originally enacted the provision with an effective date of September 6, 1991, and since that date the statute has voided any contractual provisions requiring disputes to be resolved outside Louisiana or requiring interpretation under another state's law, when at least one party is domiciled in Louisiana and the work involves construction projects within the state. The statute as it currently reads contains no statutory definition of "construction contract," instead relying on general understanding and context drawn from the statute's own descriptive language regarding public and private works projects.

Scope and Nature of the Change:

The bill's most substantive addition is the insertion of a formal, enumerated definition of "construction contract" in a new Subsection A, which did not previously exist in R.S. 9:2779. Under the proposed language, a "construction contract" is defined to mean any agreement for the design, construction, alteration, renovation, repair, or maintenance of a building, structure, highway, road, bridge, water line, sewer line, oil line, gas line, appurtenance, or other improvement to real property, including any moving, demolition, or excavation. This is an affirmative, inclusive definition of considerable breadth, extending the statute's protective reach explicitly to oil and gas pipeline infrastructure, utilities, appurtenances, and demolition and excavation activities that previously might have been subject to interpretive dispute as to whether they fell within the statute's coverage.

The new definition is tempered, however, by three express carve-outs in Subsection A(2). First, agreements involving the design, construction, alteration, renovation, repair, or maintenance of dirt or gravel roads used to access oil and gas wells and associated facilities are excluded. Second, agreements involving oil flow lines or gas gathering lines associated with transportation of production from oil and gas wells — specifically from the point of commingling to oil storage facilities or gas transmission lines — are excluded. Third, any deed, lease, easement, license, or other instrument granting an interest in or the right to possess real property is excluded, even if that instrument contains rights related to construction or improvement of the property. This third exclusion is legally significant because it prevents parties from using the public policy protections of R.S. 9:2779 to avoid otherwise valid choice-of-law or forum-selection provisions embedded in real property conveyancing instruments such as oil and gas leases, which frequently contain arbitration and governing law clauses designating out-of-state forums or applying Texas, New York, or other jurisdictions' law.

The deletion of the former Subsection A, which contained the legislature's public policy findings, represents a structural reorganization rather than a substantive change. The finding language has been retained in substance but renumbered to Subsection B, with minor editorial modifications. The deleted version of Subsection A used the phrase "null, and void, and unenforceable" with an extra comma, and the added version of what is now Subsection C corrects this to read "null, void, and unenforceable" — a typographical and technical correction consistent with the bill's stated intent to make technical changes. The former Subsection C enumerated two types of prohibited provisions — those requiring out-of-state suit or arbitration, and those requiring out-of-state legal interpretation. In the enacted version, this enumeration survives in Subsections C(1) and C(2), which are retained verbatim from existing law. The subsection cross-references are updated throughout to reflect the renumbering caused by the insertion of the new definitional subsection.

The deletion of the phrase "as described in Subsection A of this Section" and its replacement with "as described in Subsection B of this Section" throughout the statute is purely a conforming technical correction necessitated by the renumbering. Similarly, the language in the former Subsection D regarding negotiated labor contracts previously used "shall not apply" and the proposed law now reads "do not apply," which is a grammatical standardization without substantive legal effect.

Purpose and Legislative Intent:

The overriding legislative purpose is to provide a concrete, legally operative definition of the term "construction contract" that has been absent from R.S. 9:2779 since the statute's original enactment in 1991. The absence of a statutory definition has created interpretive uncertainty as to the reach of the statute's anti-waiver provisions, particularly in the oil and gas industry, where operators routinely enter into a wide variety of agreements — including pipeline construction contracts, well access road agreements, and master service agreements — that may or may not qualify as construction contracts under the existing unarticulated standard. The legislature appears to have specifically targeted this ambiguity by both extending the definition broadly to encompass oil and gas infrastructure (oil lines, gas lines, water lines) while simultaneously carving out access roads, gathering lines, and real property instruments to protect the contractual latitude that oil and gas operators have historically exercised in those specific contexts.

The carve-out for dirt and gravel access roads and oil flow lines and gas gathering lines reflects a deliberate policy choice to limit the statute's forum-selection and choice-of-law protections in contexts where the oil and gas industry likely exercises substantial political influence and where contracts are frequently negotiated between sophisticated commercial parties on a national or international scale. The exclusion of real property instruments, including leases and easements, serves the distinct purpose of ensuring that R.S. 9:2779 does not become a vehicle through which a party to an oil and gas lease — one of the most commercially consequential contracts in Louisiana's economy — could invalidate a forum-selection or governing-law clause simply because the lease contains ancillary construction-related rights.

Practical Impact and Affected Parties:

General contractors, subcontractors, and suppliers engaged in public and private works construction in Louisiana will benefit from the expanded definitional clarity, which now expressly encompasses oil and gas pipeline construction, utility installation, demolition, excavation, and similar activities. For these parties, R.S. 9:2779's public policy protections were arguably already available under the existing statute, but the new definition removes any residual ambiguity that an adverse party could exploit to argue that a particular agreement fell outside the statute's scope.

The oil and gas industry is the primary affected private-sector constituency beyond traditional construction trades. Pipeline contractors and their clients will now have express guidance that oil line and gas line construction agreements — where the pipeline serves as infrastructure rather than a gathering line associated with production transportation — fall within the definition of "construction contract" and therefore cannot contain enforceable out-of-state forum or governing-law clauses when one party is Louisiana-domiciled and the project is in Louisiana. Conversely, operators and midstream companies that use gathering-line contracts or access road maintenance agreements will retain their contractual freedom to designate out-of-state forums and governing law, because those agreements are expressly excluded from the definition.

Real estate and energy transactional attorneys will need to advise clients that deeds, leases, easements, and licenses — including mineral leases containing construction-related rights — are expressly excluded from the definition, preserving the enforceability of forum-selection and governing-law clauses in those instruments notwithstanding R.S. 9:2779's public policy provisions. This exclusion has particular significance in Louisiana's civil law tradition, where the right to contract and the sanctity of real property instruments are treated with considerable formalism. The legislature's decision to enumerate specific categories of real property instruments rather than speaking only to "conveyancing" generally suggests a deliberate effort to track the range of instruments used in Louisiana oil and gas practice.

Arbitration practitioners should note that the bill does not alter the fundamental rule of Subsection C(1), which continues to void provisions requiring arbitration or suit in a forum outside Louisiana. The interplay between R.S. 9:2779 and the Federal Arbitration Act has produced tension in Louisiana courts, and the expanded definition may invite renewed federal preemption arguments in cases where newly covered agreements contain arbitration clauses designating out-of-state forums. Louisiana courts applying the civil law method of statutory interpretation will give effect to the legislature's clear public policy declaration in the text, but federal preemption under the FAA remains a potential limiting consideration outside the legislature's unilateral