3-Utah Code §63G-6a-1203.pdf
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- Solicitation number
- DH2671-TBC
- Issued by
- Salt Lake County, Salt Lake City, Utah
About this file
This document is Utah Code Section 63G-6a-1203, a state statute governing void and unenforceable provisions in procurement contracts for Utah governmental entities. The statute, effective May 7, 2025, establishes which contract provisions are automatically void and unenforceable in state and local procurement agreements. The code applies to all procurement contracts that become operative or enforceable on or after the effective date and does not apply to contracts executed before May 7, 2025, or their extensions or renewals. The statute identifies nine categories of prohibited contract provisions, including those that restrict the state's governmental immunity protections, require indemnification of non-governmental parties, mandate binding arbitration outside state courts, subject the contract to non-Utah jurisdiction, allow unilateral vendor modifications, or permit vendors to unilaterally renew contracts. Additionally, the statute prohibits provisions that limit vendor liability for bodily injury, death, or property damage caused by negligence or willful misconduct. The statute provides that any remaining contract provisions are severable and enforceable under Utah law when prohibited provisions are removed.
The statute permits two narrow exemptions to the prohibition on non-Utah jurisdiction and venue requirements. The assistant attorney general or authorized legal counsel for a procurement unit may exempt a contract from non-Utah jurisdiction provisions if doing so promotes the state's or procurement unit's best interests due to disproportionate bargaining positions, market conditions, or other unique circumstances, provided this exemption is documented in signed, express, written authorization before contract formation. Similarly, a procurement official may exempt a contract from certain insurance and automatic renewal provisions if the contract explicitly references this section and indicates the procurement unit's intent to include such provisions. The statute also establishes that governmental entities cannot be held liable for special, incidental, indirect, or consequential damages arising from procurement contracts, regardless of any contrary contract language.
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Utah Code
Effective 5/7/2025 63G-6a-1203 Void and unenforceable provisions of a contract -- Exemptions -- Limitation of liability and damages.
(1) As used in this section, "governmental entity" means the same as that term is defined in
Section 63G-7-102.
(2) This section does not apply to:
(a) a procurement contract that becomes operative or enforceable before the effective date of this section; or
(b) the extension or renewal of a contract described in Subsection (2)(a).
(3)
(a) Except as provided under Subsections (5) and (6), a provision of a procurement contract described in Subsection (4), including a provision incorporated into the contract by reference, is void and unenforceable.
(b) Notwithstanding any provision of a procurement contract that is void and unenforceable under Subsection (3)(a), the remaining provisions of the contract are severable, valid, and enforceable to the fullest extent provided under Utah law.
(4) A provision is void and unenforceable under Subsection (3)(a) if the provision:
(a) restricts the state's or a procurement unit's protection under Chapter 7, Governmental
Immunity Act of Utah, from suit, liability, judgment, or obligation, including an obligation to respond to or defend against any claim;
(b) requires a governmental entity to indemnify, defend, or hold harmless another person;
(c) restricts a governmental entity's ability to seek relief in state court;
(d) subjects a governmental entity to binding arbitration or other form of dispute resolution outside the courts;
(e) disallows the procurement unit from having legal counsel and representation from:
(i) legal counsel that the procurement unit chooses;
(ii) the attorney general; or
(iii) legal counsel chosen by a person that has a contractual obligation to indemnify, defend, or hold harmless the state or a procurement unit, subject to the written consent of the state or the procurement unit;
(f) subject to Subsection (5):
(i) subjects a procurement contract or a party to the contract to the laws of any jurisdiction other than Utah; or
(ii) requires the parties to resolve a dispute in a jurisdiction or venue other than Utah;
(g) restricts a governmental entity from making disclosures of information, as required by law or for any legitimate governmental purpose;
(h) allows a vendor to unilaterally modify any part of the procurement contract, including any provision to which the contract contemplates giving legal effect upon the vendor providing notice to the procurement unit of the modification or of the created legal effect; and
(i) subject to Subsection (6):
(i) requires a governmental entity to maintain insurance coverage beyond the types and limits required by the state risk manager appointed under Section 63A-4-101.5, or to name an additional insured under that coverage;
(ii) allows a vendor to automatically renew a procurement contract or that creates a contractual term in violation of the terms permitted under Section 63G-6a-1204; or
(iii) limits the liability of a vendor or any third-party for bodily injury, death, or damage to tangible property caused by the negligence or willful misconduct of a vendor, a third-party, or the vendor's or third-party's employees or agents.
Utah Code
(5) The assistant attorney general or authorized legal counsel for the procurement unit that will sign a procurement contract may, via a signed, express, written authorization made prior to the formation of the contract, exempt the contract from a provision described in Subsection (4)(f), if the assistant attorney general or authorized legal counsel determines that an exemption is necessary to promote the best interests of the state or the procurement unit due to:
(a) the relative disproportionate bargaining positions of the contracting parties;
(b) market conditions; or
(c) other unique circumstances identified and described in the authorization.
(6) The procurement official for a procurement unit seeking to enter into a procurement contract may, via a signed, express, written authorization made prior to the formation of the contract, exempt the contract from a provision described in Subsection (4)(i), if the contract indicates the procurement unit's intent to include the provision, with explicit reference to this section.
(7) Notwithstanding any provision of a procurement contract to the contrary, under no circumstance may the state or a procurement unit be held liable for any special, incidental, indirect, or consequential damages arising from or relating to a procurement contract.
Amended by Chapter 69, 2025 General Session
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