This Q&A gives an overview of the legal system; foreign investment, including restrictions, currency regulations and incentives; and business vehicles and their relevant restrictions and liabilities. The article also summarises the laws regulating employment relationships, including redundancies and mass layoffs, and provides short overviews on competition law; data protection; and product liability and safety. In addition, there are comprehensive summaries on taxation and tax residency; and intellectual property rights over patents, trade marks, registered and unregistered designs.
This article is part of the PLC multi-jurisdictional guide to doing business worldwide. For a full list of contents, please visit www.practicallaw.com/dbihandbook.
Legal system
1. What is the legal system (civil law, common law or a mixture of both)?
Texas is a common law jurisdiction. It also embodies community property concepts derived from early influences of Spanish, French and Mexican law.
Foreign investment
2. Are there any restrictions on foreign investment (including authorisations required by central or local government)?
There are no restrictions on foreign investment. However, certain reporting and disclosure obligations, as well as certain restrictions on foreign investment in specific industries and assets, exist at the federal level.
3. Are there any exchange control or currency regulations?
There are no exchange control or currency regulations. However, local creditors can insist on payment in US dollars.
4. What grants or incentives are available to investors? Are any of these aimed specifically at foreign investors?
Tax abatements, tax holidays and other incentives may be offered by local jurisdictions (such as municipalities) on an ad hoc basis. However, no distinction is made between domestic and foreign investors in these circumstances.
Business vehicles
5. What is the most common form of business vehicle used by foreign companies to conduct business in your jurisdiction? In relation to this vehicle, please provide details on:
Registration formalities (including timing).
Minimum (and maximum) share capital.
Whether shares can be issued for non-cash consideration, such as assets or services (and any formalities).
Any restrictions on the rights that can attach to shares.
Any restrictions on foreign shareholders.
Management structure and any restrictions on foreign managers.
Directors' liability.
Parent company liability.
Reporting requirements (including filing of accounts) and cost of compliance.
The most common form of business vehicle used by foreign companies in Texas is a corporation, although limited liability companies and limited partnerships are not uncommon.
The Texas Business Organizations Code (BOC) became effective on 1 January 2006. The BOC provides an updated, more uniform manner of creating various types of entities (for example, corporations, partnerships and limited liability companies) by, among other things:
Adopting a common system of naming formation documents.
Providing more uniform filing mechanics.
Standardising the entity formation process.
The BOC applies to all:
Texas corporations, partnerships, limited liability companies and other domestic filing entities formed on and after 1 January 2006.
Foreign filing entities registering to do business in Texas on or after 1 January 2006.
Existing domestic and foreign entities automatically become subject to the BOC on 1 January 2010, unless those entities elect early adoption of the BOC.
Registration formalities. A Texas corporation can be formed by filing its certificate of formation (Certificate) with the Texas Secretary of State (Secretary). The Certificate must be signed by an organiser and filed with the Secretary. A Texas corporation can usually be set up in one business day.
Share capital. There are no statutory requirements on the amount of capital that can be contributed to a Texas corporation.
Non-cash consideration. Shares can be issued for cash, a promissory note, goods (or other property of any kind) or services. If non-cash consideration is given for shares, the board of directors (board) typically assigns a cash value to the consideration when authorising the issue of those shares.
Rights attaching to shares. If and as provided by its Certificate, a corporation can restrict or enhance (by means of stated preferences with respect to various classes of shares) certain rights, such as:
voting;
entitlement to dividends;
participation in key decisions.
Foreign shareholders. There are no restrictions on foreign shareholders, except for those imposed by federal law (see Question 2).
Management structure. Texas corporations generally must have a board consisting of at least one director. They must also have a president and secretary, but both positions can be held by the same individual. There are no restrictions on foreign officers or directors.
Directors' liability. A corporation can indemnify a director named defendant in a proceeding if the director:
conducted himself in good faith;
reasonably believed that his conduct was in the corporation's best interests (or, if not acting in an official capacity, that his conduct was not opposed to the corporation's best interests); and
in the case of any criminal proceeding, had no reasonable cause to believe his conduct was unlawful.
However, certain federal statutes (such as the Sarbanes-Oxley Act (15 USC § 7201) and the Foreign Corrupt Practices Act (15 USC § 78dd-1, et seq)) deny the right of indemnification to directors found guilty of violating their provisions.
Parent company liability. Generally, a corporation's shareholders are not liable for the corporation's obligations. A shareholder cannot be held liable unless they caused the corporation to be used to commit a fraud primarily for the shareholder's direct personal benefit.
Reporting requirements. Texas corporations must file an annual franchise tax return with the Texas Comptroller of Public Accounts.
Employees
6. What are the main laws regulating employment relationships?
Texas is an employment-at-will state (that is, an employee without a contract for a definite term can resign or be dismissed without liability, at any time and for any reason that does not violate a statute). Other than the state statutes (see Questions 9 and 10), Texas follows the federal regulatory regime in relation to employment relationships. No distinction is made under Texas law between a US employee and a foreign employee.
Generally, a Texas employer and employee can choose the governing law of their employment contract if the jurisdiction chosen bears a reasonable relationship to the employment. However, some Texas law provisions apply as a matter of public policy, regardless of any contrary agreement between the parties, for example, those in relation to:
Workers' compensation.
Non-compete agreements.
Discrimination.
7. Is a written contract of employment required? Are any agreements and/or implied terms likely to govern the employment relationship?
A written contract is not required. Texas guarantees the right to work irrespective of membership or non-membership in a union. Employers cannot:
Require employees or applicants to join or remain members of a labour union.
Prohibit employees from seeking or maintaining union membership.
The Texas Labor Code also regulates labour unions, the organisation of activities and the arbitration of labour disputes and grievances.
8. Are employees entitled to management representation and/or to be consulted in relation to corporate transactions (such as redundancies and disposals)?
In the absence of a collective bargaining agreement, employees are not entitled to management representation or consultation in relation to the conduct of their employer's business.
9. How is the termination of individual employment contracts regulated?
Under the employment-at-will doctrine (see Question 6), an employer may dismiss an employee without a definite term employment contract for any or no reason. There is no distinction between fair/justified and unfair/unjustified dismissal, and no advance notice is required in these circumstances. Dismissal can be immediate and without further compensation to the employee (except for earned but as yet unpaid wages).
However, when the employer and employee are bound by an employment contract or by a collective bargaining agreement (CBA), the terms of the contract or the CBA govern their relationship. Generally the contract or CBA defines criteria by which the employee may be justly dismissed by the employer, the advance notice that is required and the severance compensation (if any) that will be paid for dismissal on justified or unjustified grounds. In addition, an employer must pay discharged employees in full.
An exception to the employment-at-will doctrine is that an employer cannot dismiss an employee solely because the employee refused to perform an illegal act that carries criminal penalties.
Texas law provides a number of statutory exceptions to the at-will rule which parallel and sometimes exceed federally created exceptions. For example, the Texas Human Rights Act (Chapter 21, Texas Labor Code) (THRA) prohibits employers with 15 or more employees from discriminating on the basis of:
Race.
Colour.
Disability.
Sex.
Religion.
National origin.
Age.
The THRA gives employees a private cause of action, but also requires the employee to exhaust administrative remedies by filing an administrative complaint with the Texas Workforce Commission (TWC), Civil Rights Division and receiving a right-to-sue notice.
There are a number of other specific statutory exceptions to the at-will rule, including, for example, statutes prohibiting:
Discharge for exercising rights under the THRA.
Discharge based on the employee's genetic information or the employee's refusal to submit to genetic testing.
Discharge for jury service.
Discharge for exercising the right to vote.
Discharge based on good faith workers' compensation claims.
Discharge for complying with a subpoena.
10. Are redundancies/mass layoffs regulated? If so, please give details.
As an employment-at-will state (see Question 6), Texas does not regulate redundancies or mass layoffs. However, employees in these circumstances may be protected by:
Written contract.
Collective bargaining agreements.
US federal legislation applicable to mass layoffs.
11. Do foreign employees require work permits and/or residency permits? If so, how long does it take to obtain them and how much do they cost?
A foreign person employed in the US must obtain an appropriate visa which permits him to work (or be trained) in his specified position. These visas are issued at the federal level by the US Citizen and Immigration Services.
Tax
12. In relation to employees, what constitutes tax residency in your jurisdiction?
Texas currently does not have a personal income tax on the earnings and income of individuals. Therefore, tax residency is not material for state taxation of individuals in Texas.
13. What income tax or social security contributions must the following pay:
Tax resident employees?
Non-tax resident employees?
Employers, in relation to their employees?
Texas does not impose a personal income tax (see Question 12). Texas does not impose a state-level social security tax similar to that imposed by the US federal government, although Texas employers are generally required to pay unemployment compensation tax with respect to the first US$9,000 (as at 1 October 2010, US$1 was about EUR0.7) of wages paid to their employees at a rate which varies based upon the employer's claims history.
Federal income taxes vary according the level of the employee's total wages. An employer must withhold from the employee's wages, and pay the amount withheld directly to the US Internal Revenue Service.
14. In relation to business vehicles, what constitutes tax residency in your jurisdiction?
Texas subjects a taxable entity (which includes nearly every limited liability entity) to franchise tax if it has sufficient contact with Texas to be taxed without violating the US Constitution.
15. Please give details on the main taxes that potentially apply to a tax resident business vehicle (including rates).
Franchise tax
Franchise tax (commonly known as the margin tax) is based on a taxpayer's taxable margin, which is the taxpayer's total revenue minus the greater of either:
Cost of goods sold.
Compensation (for example, cash compensation paid to officers, directors and employees).
Taxable margin cannot exceed 70% of the taxpayer's total revenue. The franchise tax is generally imposed at a rate of 1% of taxable margin. Certain entities primarily engaged in retail or wholesale trades are subject to a lower, alternative rate of 0.5%.
Taxpayers that owe less than US$1,000 in franchise tax are exempt from franchise tax for that year. For reports from 2010 to 2011, taxpayers that have total revenues of US$1 million or less are also exempt from franchise tax. This total revenue threshold decreases to US$600,000 or less for reports from 2012 or later.
The franchise tax is imposed on virtually all limited liability entities, including most partnerships, corporations and limited liability companies. It will not be payable by, among others, sole proprietorships, general partnerships that are owned entirely by individual persons and certain unincorporated passive entities.
Taxpayers that are part of an affiliated group engaged in a unitary business must file a combined group report, rather than an individual report, and are treated as a single taxpayer. A unitary business is a single economic enterprise in which the entities are interdependent, integrated and interrelated through their activities so that the entities share and contribute to each other's value.
Property tax
State agencies are funded through the franchise tax and sales tax. Cities, counties, school districts and other Texas local governments are funded primarily through property tax, which is imposed on real property and business personal property. By 15 April of each year, owners of business personal property must file a rendition reflecting the value and location of all such property with their local assessor's office. Failure to accurately render property exposes owners of business personal property to a 10% penalty on the amount of property tax owed on the property. On 1 January of each year, taxable property is valued by the central appraisal district for the county in which the property is located. Taxpayers can protest property valuations before the central appraisal district's appraisal review board. Tax rates vary widely between different cities, counties, school districts and other local government agencies.
Sales tax
Texas also imposes a sales tax of 6.25% on retail sales of tangible personal property, as well as on a number of services. Local sales taxes can also be imposed, up to a maximum combined state and local rate of 8.25%. The sales tax is collected by the seller at the point of sale or service. Taxpayers who purchase tangible property or taxable services outside of Texas for use in Texas are liable for a corresponding use tax.
Other taxes
Other state and local taxes which can affect a business operating in Texas are:
Motor fuel taxes.
Severance taxes with respect to the extraction of hydrocarbons from the subsoil.
Utility gross receipts taxes imposed against companies that own or operate gas or water works, or electrical generation facilities.
16. How are the activities of non-tax resident business vehicles taxed?
17. Please explain how each of the following is taxed:
Dividends paid to foreign corporate shareholders.
Dividends received from foreign companies.
Interest paid to foreign corporate shareholders.
Intellectual property (IP) royalties paid to foreign corporate shareholders.
For the purposes of answering this question, a company or corporate shareholder is considered to be foreign if it is organised under the laws of a US state other than Texas or a non-US jurisdiction. Foreign corporations are subject to the Texas margin tax if they are doing business in Texas. Receipts of foreign corporations not doing business in Texas may be included in calculating a combined group's margin tax, but such receipts will be excluded from the numerator of the combined group's apportionment fraction even if they are Texas-sourced receipts.
Dividends paid. If any corporate shareholder (foreign or otherwise) receives a dividend from a corporation that is a member of its combined group for purposes of the Texas franchise tax, then for the purposes of computing the taxable margin of the combined group, the payee does not include the dividend in its taxable margin, and the payor may not deduct the dividend from its taxable margin. If a foreign corporate shareholder doing business in Texas receives a dividend from a corporation that is not a member of its combined group for purposes of the Texas margin tax, the payee may exclude the dividend from its taxable margin to the extent the dividend is deductible to the payee under US federal income tax laws.
If a foreign corporate shareholder doing business in Texas receives a dividend from a non-US corporation that is not a member of its combined group, such dividend is not included in taxable margin.
For apportionment purposes, dividends are sourced to the location of the payor, with the result that even though a dividend may be included in taxable margin, it may still not be subject to the franchise tax if it is not included in the numerator of the apportionment fraction.
Dividends received. Dividends received from a US foreign company by a corporation (not a member of the US foreign company's combined group) subject to the Texas franchise tax are not included in taxable margin to the extent such dividends are not included in the payee's taxable income for US federal income tax purposes. Dividends received from a non-US foreign company by a US corporation that is subject to the Texas franchise tax are not included in taxable margin. For apportionment purposes, dividends are sourced to the location of the payor, with the result that even though a dividend may be included in taxable margin, it may still not be subject to the margin tax if it is not included in the numerator of the apportionment fraction.
Interest paid. If a foreign corporate shareholder is paid interest by a corporation that is a member of its combined group for purposes of the Texas franchise tax, then for purposes of computing the taxable margin of the combined group, the payee does not include the interest in its taxable margin, and the payor may not deduct the interest from its taxable margin. If a foreign corporate shareholder doing business in Texas is paid interest by a corporation that is not a member of its combined group for purposes of the Texas franchise tax, the interest is included in the foreign corporate shareholder's taxable margin. For apportionment purposes, interest is sourced to the location of the payor, with the result that even though interest may be included in taxable margin, it may still not be subject to the margin tax if it is not included in the numerator of the apportionment fraction.
IP royalties paid. If a foreign corporate shareholder is paid IP royalties by a corporation that is a member of its combined group for Texas franchise tax purposes, then for purposes of computing the taxable margin of the combined group, the payee does not include the IP royalty payments in its taxable margin, and the payor may not deduct the IP royalty payments from its taxable margin. If a foreign corporate shareholder doing business in Texas is paid IP royalties by a corporation that is not a member of its combined group for purposes of the Texas franchise tax, the IP royalty payments are generally included in taxable margin, except in the case of foreign royalties. For apportionment purposes, IP royalty payments (other than payments from sales of intangibles) are sourced to Texas to the extent the IP is used in Texas, with the result that even though IP royalty payments may be included in taxable margin, they may still not be subject to the franchise tax if they are not included in the numerator of the apportionment fraction.
18. Are there any thin capitalisation rules (restrictions on loans from foreign affiliates)? If so, please give details.
Texas does not have thin capitalisation rules, although such rules do exist at the federal level.
19. Must the profits of a foreign subsidiary be imputed to a parent company that is tax resident in your jurisdiction (controlled foreign company rules)?
Foreign dividends, including profits imputed to US shareholders under Section 78 or Sections 951 to 964 of the US Internal Revenue Code, are not included in taxable margin.
20. Are there any transfer pricing rules? If so, please give details.
Texas does not have transfer pricing rules, although such rules do exist at the federal level.
21. How are imports and exports taxed?
Texas, along with all other states in the US, is prohibited by the US Constitution from levying duties on imports or exports.
22. Is there a wide network of double tax treaties? If so, please give details.
See Doing Business in... United States.
Competition
23. Are restrictive agreements and practices regulated by competition law in your jurisdiction? If so, please give brief details.
The Texas Free Enterprise and Antitrust Act (Chapter 15, Texas Business and Commerce Code) (TFEAA) is similar to the federal Sherman Act (15 USCA §§ 1-7). Section 15.05 of the TFEAA has provisions much like the Sherman Act §§ 1 and 2 (prohibiting concerted action in restraint of trade and monopolisation and attempts or conspiracy to monopolise) and the Clayton Act § 7 (prohibiting unlawful mergers and acquisitions) (see, respectively, 15 USCA § 1, 2 and 18 et seq). Civil remedies and criminal penalties are provided for in the legislation.
There is no requirement in Texas for pre-merger notification, nor any prohibition against price discrimination.
The TFEAA covers trade and commerce occurring wholly or partly within Texas. It explicitly requires that it be construed in harmony with federal law, to the extent that this can be done while remaining consistent with its purpose.
However, in relation to anti-trust cases brought on the grounds of predatory pricing, the Texas Supreme Court has developed a unique, specific standard, as compared to the more general federal standard. The statute also:
Specifically maintains most explicit federal anti-trust exemptions.
Does not prohibit actions approved or required by a governmental agency.
Protects actions by providers of professional services that are designed to improve quality or cut costs.
The Texas anti-trust laws can be enforced by:
Persons who have been injured, or are threatened with injury, by a violation of the statute (other than by an allegedly unlawful merger).
The Attorney General of Texas.
Successful private and governmental claimants may recover actual damages, which will be trebled on a finding that the unlawful conduct was wilful or flagrant. Indirect purchasers lack standing to bring an anti-trust claim. The statute of limitations is four years. The Texas Attorney General also has authority to investigate possible anti-trust violations using civil investigative demands for documents and testimony. In an action brought by the Attorney General to challenge a merger or acquisition that may lessen competition, a court can order divestiture.
Intellectual property
24. Please outline the main intellectual property rights that are capable of protection in your jurisdiction. In each case, please state:
Nature of right.
How protected.
How enforced.
Length of protection.
Patents
Nature of right. Patents are issued under federal law. The patent holder has a judicially enforceable right to exclude others from making, using, selling, offering to sell in or importing into the US the patented item.
How protected. Patent protection is obtained by filing a patent application with the US Patent and Trademark Office.
How enforced. The patent holder can enforce his rights through a court-ordered injunction, and, in some instances, by the intervention of the US customs authorities when infringing goods arrive from overseas. Federal agencies may also confiscate pirated goods and penalise the infringers.
Length of protection. Protection lasts for 20 years from the date of filing the application. In certain instances, the protection may be extended by a number of days, which will always be displayed on the face of the patent. This right is not renewable.
Trade marks
Nature of right. Any person who has used a mark in connection with goods or services in Texas can apply for registration of the mark (Chapter 16, Texas Business and Commerce Code). The items excluded from registration are the same as those found in the Federal Trademark Act (15 USC § 1052) (for example, immoral, deceptive or scandalous matter).
Palming off is similar to, but broader than, trade mark infringement. It is the use or simulation by someone of the name, symbol or device of a business rival in a way calculated to deceive and cause the public to trade with the second when they intended to have traded with the first. The scope of this protection is broader than that provided by statutory trade mark law because it considers the total physical image of the product and the name together. The remedies for unfair competition include injunctions and monetary damages (such as lost profits and punitive damages).
The Texas Anti-Dilution Statute (Texas Business and Commerce Code § 16.29) follows the Model State Trademark Act as prepared and published by the International Trademark Association, www.inta.org. The owner of a distinctive mark can seek to prevent any act likely to dilute the distinctive quality of a mark, regardless of whether the mark is registered or whether there is competition between the parties or confusion between the marks.
How protected. Protection is by registration on application to the Secretary and payment of a fee of US$50. Registration of a mark is constructive notice of the registrant's claimed rights in the mark and is prima facie proof of ownership, validity and the exclusive right to use the mark in Texas.
How enforced. Trade mark registration entitles the registrant to sue for damages and an injunction for any infringement of the mark. There is no provision in the Texas statute allowing the recovery of lawyers' fees or costs.
Length of protection. Trade mark registration is for a term of ten years, with successive ten-year renewal periods available.
Registered designs
Nature of right. A distinctive design (logo) can be registered as a trade mark as long as it identifies the source of goods or services (Chapter 16, Texas Business and Commerce Code). Copyright protection under federal law may also be available for an artistic logo.
How protected. A trade mark registration is obtained on application to the Secretary of State and payment of a fee of US$50. Registration of a mark is constructive notice of the registrant's claimed rights in the mark and is prima facie proof of ownership, validity, and the exclusive right to use the mark in Texas. Copyright registration is obtained on application to the Library of Congress.
How enforced. A registrant can sue for damages and injunction for any infringement of the trade mark and/or copyright.
Length of protection. Trade mark registration is for a term of ten years, with successive ten-year renewal periods available. Generally, for works created after 1 January 1978, copyright protection lasts for the life of the author plus 70 years.
Unregistered designs
Nature of right. Common law ownership rights in a distinctive design (logo) are acquired through actual use of the mark in commerce. Copyright protection under federal law may also be available for an artistic logo.
How protected. Trade mark protection for an unregistered logo exists under common law from the time the logo is first used in connection with goods or services in commerce. Copyright protection exists from the time that the artistic logo is created in fixed form.
How enforced. A design owner can bring an action for unfair competition. A copyright registration must be obtained for enforcement of the copyright.
Length of protection. The design will be protected under common law for so long as the design is used to identify the source of goods and services. For works created after 1 January 1978, copyright protection generally lasts for the life of the author plus 70 years.
Copyright
Nature of right. Copyright protection of original works of authorship is a matter of federal law. The owner of a copyright usually has the exclusive right to, or to allow others to, use, reproduce, distribute, perform, display and create derivative works of the copyrighted work. Examples of works protected by copyright are literary works, musical works, sound recordings, motion pictures and software.
How protected. Copyright protection exists from the time that a work of authorship is created in fixed form. Important enforcement advantages can be obtained through registration of the work with the US Library of Congress in Washington DC.
How enforced. The holder of a registered copyright can enforce his exclusive rights to the copyrighted work through an action brought in federal court. Monetary damages for copyright violations can also be awarded to the copyright holder.
Length of protection. Generally, for works created after 1 January 1978, copyright protection lasts for the life of the author plus 70 years.
Confidential information
Nature of right. Texas provides common law trade secret protection in civil matters and statutory protection in the criminal context, but it has not adopted the Uniform Trade Secrets Act (14 ULA § 433).
A trade secret is defined as any scientific or technical information, design, process, procedure, formula, or improvement that has value and that the owner has taken measures to prevent from becoming available, other than to persons selected by the owner to have access for limited purposes.
How protected. The owner of a trade secret can make the trade secret known to others subject to a contractual duty not to use or disclose the secret. A person that uses or discloses the trade secret in violation of that duty has committed misappropriation and is liable for damages.
How enforced. A person commits a third-degree felony in Texas if he knowingly steals a trade secret, makes a copy of an article representing a trade secret, or communicates or transmits the trade secret without the owner's consent. A civil action can also be brought by an aggrieved private party in a state court for misappropriation of trade secrets under Texas common law. The claimant can claim damages for losses incurred and/or equitable relief (such as an injunction).
Length of protection. A trade secret can be protected indefinitely, as long as secrecy is maintained.
Marketing agreements
25. Are marketing agreements regulated in your jurisdiction? If so, please give brief details in respect of the following arrangements:
Agency.
Distribution.
Franchising.
Agency. There are no specific laws on agency (in the marketing sense) in Texas.
Distribution. There are no specific laws on distribution in Texas.
Franchising. Texas does not regulate the sale of franchises as such. The Texas Business Opportunity Act (Texas Business and Commerce Code § 51.001 et seq.) (BOA) exempts from its coverage the sale of arrangements qualifying as franchises under federal regulations, provided the seller files a prescribed notice with the Texas Secretary of State. Otherwise, the BOA protects against false, misleading, or deceptive practices in the marketing and sale of business opportunities (including the sale of a franchise if it is not exempt).
E-commerce
26. Are there any laws regulating e-commerce (such as electronic signatures and distance selling)? If so, please give brief details.
Electronic (as opposed to written) records and signatures are valid and enforceable and, therefore, electronic contracts are a viable medium of agreement (Uniform Electronic Transactions Act (Texas Business and Commerce Code § 43.001)).
Data protection
27. Are there any data protection laws? If so, please give brief details.
Breaches of computer security are punishable as a criminal offence under Chapter 33 of the Texas Penal Code. Under the Penal Code, access, without the owner's consent, to a computer, computer network or computer system constitutes a punishable offence.
Under the Identity Theft Enforcement and Protection Act, businesses must implement and exercise reasonable procedures to safeguard their clients' information. If an information security breach occurs, the business must notify the client whose sensitive personal information was, or was reasonably believed to be, acquired by an unauthorised person (Chapter 48, Texas Business and Commerce Code).
Texas statutes also protect the confidentiality of specific categories of information including, for example, genetic information and AIDS test results.
Product liability
28. Are there any laws regulating product liability and product safety? If so, please give brief details.
Product liability is generally a common law cause of action, arising in tort.
Manufacturers, distributors and vendors (sellers) who design, manufacture, distribute, sell or otherwise introduce defective products into the Texas market can be held liable for injuries incurred by those who use or consume the products in the state.
Sellers who fail to warn of uses or actions which may cause products to result in injury or harm can be held liable in the same manner, as can sellers who negligently manufacture or handle, misrepresent the quality of, or make false claims regarding, these products.