Source: Beazley, A&E Reporter, Volume 7, Issue 1 – January 2012
New Mexico Statute Prohibits Choice of Law Provisions
Design professionals performing services on projects located in New Mexico are advised that the New Mexico legislature passed House Bill 64 which enacted NMSA (1978) 57-28A-1, and applies to all construction contracts entered into on or after July 1, 2011. The statute provides that any provision of a construction contract is void, unenforceable and against New Mexico public policy if the provision: 1. makes the construction contract subject to the laws of another state; or 2. requires any litigation arising from the contract to be conducted in another state. Construction contract is broadly defined pursuant to section C of the statute as “a public, private, foreign or domestic contract or agreement related to construction, alteration, repair or maintenance of any real property in New Mexico and includes agreements for architectural services, demolition, design services, development, engineering services, excavation or other improvement to real property, including buildings, shafts, wells and structures, whether on, above or under real property.” The statute also requires that any mediation, arbitration “or other dispute resolution proceeding arising from or relating to” a construction contract performed in New Mexico shall be conducted in New Mexico.
This prohibition will disallow client attempts to modify industry standard documents’ choice of law provisions, which typically stipulate that professional services agreements are governed by the law of the place where the project is located (e.g., Article 10.1 in the AIA B101 – 1007 Standard Form of Agreement between Owner and Architect). However, the statute cuts both ways because there could be specific issues under applicable New Mexico law governing the interpretation and enforcement of the contract for which out-of-state design professionals should seek the assistance of local counsel.