The Houson [14th] Court of Appeals has ruled that an indemnity provision contained in a document incorporated by reference into an agreement between a railroad and a contractor was not enforceable because the provision was not conspicuous and didn’t satisfy the fair notice requirements.
Deacero, S.A.P.I. de C.V. v. BNSF Railway Company (No. 14-23-00359-CV; May 30, 2026) arose from a lawsuit brought by an employee of BNSF for injuries sustained on the job. He sued BNSF and Deacero, a Mexican manufacturer headquartered in Monterrey. BNSF contracted with Deacero to transport products to the U.S. under an agreement (the “Price Authority”) that “provides the rates, routes, and other terms and conditions applicable to customer shipments along certain BNSF routes. The agreement at issue governed the shipping arrangement from October 1, 2019 to November 30, 2019. Among other provisions, the agreement incorporated by reference to “RL SUB BNSF 6100 RULES BOOK” and directed Deacero to its website for a copy.
Although the text of the Price Authority did not contain an indemnity clause, the BNSF 6100 did. This provision appeared on page 17 of the rule book in a section entitled “Specific Rules and Regulations—Without Charges.” Much in the standard fashion, the indemnity clause required the “customer” to “release, indemnify and hold harmless Railroad Parties, for all loss, damage, or injury . . . arising from” various malfeasances, including for damage or injury [that] was occasioned by or contributed to by the negligence of the Railroad Parties, except to the extent that such claims are proximately caused by the intentional conduct or gross negligence of the Railroad Parties.” A nearly identical provision also appeared in the 90010 Rules Book, incorporated by reference by the 6100 Rules Book, the only difference being that, while both provisions appear in full caps, the 90010 Rules Book version is also in bold font. The 90010 Rules Book further includes a third indemnity provision, but this one was not capitalized or distinguished from the surrounding text.
Plaintiff’s injury occurred when he was struck and injured by a door protruding from a nearby railcar, which was filled with steel manufactured by Deacero. He sued BNSF for negligence under FELA. He then amended his petition to include claims against Deacero for negligence in loading and failing to secure the railcar. BNSF cross-claimed against Deacero, asserting the indemnity clause. Deacero filed a traditional MSJ on the basis that the indemnity provisions didn’t satisfy the fair notice requirements and was unenforceable. BNSF filed its own MSJ. The trial court denied Deacero’s motion and granted BNSF’s. Deacero appealed.
In an opinion by Justice Bourliot, the court of appeals reversed. The court observed that “[r]isk-shifting provisions such as indemnity clauses must satisfy two fair notice requirements: (1) the express negligence test and (2) conspicuousness” (citations omitted). SCOTX has held that conspicuousness requires that “something must appear on the face of the [contract] to attract the attention of a reasonable person when he looks at it” (citations omitted). The Court further adopted the UCC definition (§ 1.201(10), Business & Commerce Code), which calls for “(A) a heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and (B) language in the body of a record or display in larger type than the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.” If the provision doesn’t measure up, it can’t be enforced. Of course, if the indemnitee can prove that the indemnitor had actual notice of the indemnity clause, it can be enforced whether regardless of whether conspicuous on the face of the contract.
BNSF argued that the 6100 Rules Book was “clearly incorporated by reference on the first page of the Price Authority” and became part of the contract. The provision thus satisfied the fair notice requirements. The court, however, didn’t buy it. The court observed that “Texas courts have generally found it relevant that an indemnity provision is either found or at least mentioned on the first page of the contract and is set apart in some way from other text” (citing Dresser Industries). It cited a long list of cases purporting to support this proposition, as well as a 2005 Corpus Christi-Edinburg court of appeals decision holding that an indemnity clause that appeared in the sixth of six documents incorporated by reference under a non-specific, “generic” title was not conspicuous and didn’t provide fair notice. Another case from the Texarkana court of appeals, this one in 2014, held that an indemnity clause incorporated by a website and included in a paragraph in a price estimate page “written in tiny print directing the customer to its website containing terms and conditions.” The court held that the customer didn’t get fair notice “because the paragraph referencing the terms and conditions was written in regular font at the bottom of the last page of the six-page document and did not refer to any liability-limiting provision.”
Looking back to Price Authority, the court concluded “that the generic title referring to the 6100 Rules Book does not attract the attention of a reasonable person to afford fair notice of the presence of a risk-shifting indemnity clause contained therein” (against citing Dresser Industries). The court based its ruling on three factors: (1) the part of the Price Authority, called General Rules, that referenced the 6100 Rules Book was “set off in a slightly larger type of all bond capital letters, (2) reference to the 6100 Rules Book appeared in the sixth of nine bullet points among unrelated terms, and (3) was printed in the same size and type as the surrounding text. “And,” the court added, “nothing on the face of the Price Authority notifies the customer of the risk-shifting indemnity provisions located in BNSF’s general website where the 6100 Rules Book is purportedly located and in the 90010 Rules Book, which is incorporated by the 6100 Rules Book (assuming the customer is able to locate the 6100 Rules Book.”
In short, though BNSF argued that the indemnity provision in the 6100 Rules Book was conspicuous, it didn’t matter because “nothing on the face of the contract attracts the attention of a reasonable person to afford fair notice of the presence of the risk-shifting indemnity clause at the website.” But even if it had and the 6100 Rules Book was part of the Price Authority, the court would have found the indemnity provision inconspicuous anyway. The court observed that the indemnity provision in the Rules Book was not printed in “larger type, contrasting color, or in an otherwise distinguishable manner from the surrounding text (internal citation omitted). A reasonable person should not be expected to investigate the text of the Price Authority to locate the paragraph directing them to a general website; navigate the website to find the 6100 Rules Book; and then review the text of the table of contents, which is printed in the same respective size and type, to discover ‘Item 2265—Liability and Indemnity’—the indemnity provision.” And it went without saying (though the court said it), that a reasonable person couldn’t be expected to “analyze the text of the 6100 Rules Book to locate the provision referencing the 90010 Rules Book, which is listed under section 1 entitled ‘General Rules and Regulations, Item 1160—BNSF Published Signatureless Contracts.” Moreover, “[t]he intent of the fair notice requirements is defeated if parties are allowed to remove risk-shifting clauses to secondary documents that are only inconspicuously referenced on the face of the contract.”
BNSF’s last throw was the actual knowledge argument. It asserted that “Deacero’s representative conceded that the Rules Books were incorporated into the Price Authority and that the Price Authority was subject to the Rules Books.” It also offered evidence of its course of dealings with Deacero, which showed that BNSF and Deacero had entered into similar agreements at least 40 times. But that evidence didn’t rise to the level of the conclusive evidence needed to prevail on summary judgment. Perhaps if BNSF had “specifically brought the inconspicuous waiver to Deacero’s attention,” that might have made a difference. But there was no evidence that it did. The court thus reversed the trial court’s judgment and remanded for further proceedings.
