Qualified Transaction

A qualified transaction is one route into the Texas Business Court for a commercial dispute. It is not a substitute for the amount in controversy: an action arising out of a qualified transaction must also involve more than $5 million in controversy.

The definition and its exclusions

Under Tex. Gov't Code § 25A.001(14), a qualified transaction is a transaction, or a series of related transactions, under which a party pays or receives, or lends or borrows, an aggregate of at least $5,000,000. The figure was $10,000,000 until H.B. 40 cut it, effective September 1, 2025 and reaching back to actions commenced on or after September 1, 2024. The definition carves out loans made by banks, credit unions and savings and loan associations, so an ordinary bank credit facility does not qualify no matter how large it is. A loan from a nonbank lender is not excluded. A seller note, an earnout, a private placement or an intercompany advance can.

Jurisdiction turns on both the deal and the claim. Under § 25A.004(d)(1), an action arising out of a qualified transaction falls inside the grant only if the amount in controversy exceeds $5 million, excluding interest, statutory damages, exemplary damages, penalties, attorney's fees and court costs. Under § 25A.004(i), that amount is the total of all joined parties' claims.

Series of related transactions

That phrase was added by H.B. 40 and it does real work. Before the amendment, a party trying to reach the threshold had to point at one transaction. Roll-ups, staged acquisitions and multi-tranche financings all sat awkwardly against that language. Now a set of related dealings can be aggregated. What makes them related is not defined, and that is where the argument will be. Common parties, a single negotiation, cross-referenced documents and a shared closing all help. A string of unconnected purchase orders with the same vendor probably does not.

What is not a transaction

A proposal is not a transaction. In G-Force & Associates v. Bloecher, 2025 Tex. Bus. 18 (8th Div. May 14, 2025), the party invoking business court jurisdiction pointed to construction project bids. Applying the pre-H.B. 40 $10 million definition, the court held that pending bids were not a consummated agreement and so were not a qualified transaction, and it remanded the case. The lesson is narrow but useful. Money that might have changed hands under a deal nobody ever struck does not count toward the aggregate.

The party invoking jurisdiction bears the burden of establishing it. A removal notice or petition that recites the qualified-transaction label without identifying the instruments, the parties and the consideration gives the court little to evaluate.