How Texas Treats Legal Funding Agreements
There is currently no law that specifically regulates consumer legal funding transactions in Texas. Instead, legal funding agreements are generally governed by state contract law, making the written agreement one of the most important parts of the funding process.
Before signing, review the agreement carefully to understand the funding amount, repayment terms, applicable fees, and other material provisions. Taking time to read the agreement can help you better understand your rights and responsibilities before accepting funding.
What Your Funding Agreement Should Explain
A legal funding agreement should clearly explain how the transaction works before you agree to its terms. Important details include the amount you will receive, how repayment is calculated, and any fees or charges that may apply throughout the agreement.
If you have questions about any provision, discuss them with your attorney before signing. A clear agreement helps you make an informed decision and understand what to expect if your case settles successfully.
Texas Consumer Protection Laws
General consumer protection and contract laws continue to apply to many business transactions in Texas, even though the state has not adopted a Consumer Legal Funding Act. Those laws help protect consumers from false, misleading, or deceptive business practices.
Reviewing your funding agreement before signing can help you identify important terms and better understand the transaction. If something is unclear, ask questions before moving forward.
Proposed Changes to Texas Lawsuit Funding Transparency
Texas lawmakers have considered legislation that would establish additional requirements for consumer legal funding agreements, including written disclosures and other contract standards. Those proposals have not become state law. Learn more by reading The Disclosure of Third-Party Litigation Funding.
Although no comprehensive consumer legal funding statute currently exists, proposed legislation reflects continued interest in transparency for legal funding transactions. Following future changes to Texas law can help you stay informed about your rights before entering a lawsuit funding agreement