# Tex. Disciplinary R. Prof. Conduct 1.04: Rule 1.04. In addition, this Rule does not apply to standard commercial transactions between > Texas · Court rules · In force URL: https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_04 ## Section - **Citation:** Tex. Disciplinary R. Prof. Conduct 1.04 - **Heading:** Rule 1.04. In addition, this Rule does not apply to standard commercial transactions between - **Jurisdiction:** Texas - **Kind:** Court rules - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** Texas Disciplinary Rules of Professional Conduct / Rule 1.04 ## Text RULE 1.04. In addition, this Rule does not apply to standard commercial transactions between the lawyer and the client for products or services that the client generally markets to others, for example, banking or brokerage services, medical services, products manufactured or distributed by the client, and utilities’ services. In such transactions, the lawyer has no advantage in dealing with the client, and the restrictions in paragraph (a) are unnecessary and impracticable. 2. If the client is not independently represented in the transaction, the lawyer should discuss both the material risks of the proposed transaction, including any risk presented by the lawyer’s involvement, and the existence of reasonably available alternatives and should explain why the advice of independent legal counsel is desirable. 3. The risk to a client is greatest when the client expects the lawyer to represent the client in the transaction itself or when the lawyer’s financial interest otherwise poses a significant risk that the lawyer’s representation of the client will be materially limited by the lawyer’s financial interest in the transaction. Here the lawyer’s role requires the lawyer to comply, not only with the requirements of paragraph (a), but also with the requirements of Rule 1.06. Under Rule 1.06, the lawyer must disclose the risks associated with the lawyer’s dual role as both legal adviser and participant in the transaction, such as the risk that the lawyer will structure the transaction or give legal advice in a way that favors the lawyer’s interests at the expense of the client. Moreover, the lawyer must obtain the client’s informed consent. In some cases, the lawyer’s interest may be such that Rule 1.06 will preclude the lawyer from seeking the client’s consent to the transaction. 4 ipant in the transaction, such as the risk that the lawyer will structure the transaction or give legal advice in a way that favors the lawyer’s interests at the expense of the client. Moreover, the lawyer must obtain the client’s informed consent. In some cases, the lawyer’s interest may be such that Rule 1.06 will preclude the lawyer from seeking the client’s consent to the transaction. 4. If the client is independently represented in the transaction, the paragraph (a)(1) requirement for full disclosure is satisfied either by a written disclosure by the lawyer involved in the transaction or by the client’s independent counsel. The fact that the client was independently represented in the transaction is relevant in determining whether the agreement was fair and reasonable to the client as paragraph (a)(1) further requires. 38 Literary Rights 5. An agreement by which a lawyer acquires literary or media rights concerning the conduct of representation creates a conflict between the interests of the client and the personal interests of the lawyer. Measures suitable in the representation of the client may detract from the publication value of an account of the representation. Paragraph (c) does not prohibit a lawyer representing a client in a transaction concerning literary property from agreeing that the lawyer’s fee shall consist of a share in ownership in the property, if the arrangement conforms to Rule 1.04 and to paragraph (h) of this Rule. Person Paying for Lawyers Services 6. Paragraph (e) requires disclosure to the client of the fact that the lawyers services are being paid for by a third party. Such an arrangement must also conform to the requirements of Rule 1.05 concerning confidentiality and Rule 1.06 concerning conflict of interest. Where the client is a class, consent may be obtained on behalf of the class by court-supervised procedure Lawyers Services 6. Paragraph (e) requires disclosure to the client of the fact that the lawyers services are being paid for by a third party. Such an arrangement must also conform to the requirements of Rule 1.05 concerning confidentiality and Rule 1.06 concerning conflict of interest. Where the client is a class, consent may be obtained on behalf of the class by court-supervised procedure. Where an insurance company pays the lawyer’s fee for representing an insured, normally the insured has consented to the arrangement by the terms of the insurance contract. Prospectively Limiting Liability 7. Paragraph (g) is not intended to apply to customary qualification and limitations in legal opinions and memoranda. Acquisition of Interest in Litigation 8. This Rule embodies the traditional general precept that lawyers are prohibited from acquiring a proprietary interest in the subject matter of litigation. This general precept, which has its basis in common law champerty and maintenance, is subject to specific exceptions developed in decisional law and continued in these Rules, such as the exception for contingent fees set forth in Rule 1.04 and the exception for certain advances of the costs of litigation set forth in paragraph (d). A special instance arises when a lawyer proposes to incur litigation or other expenses with an entity in which the lawyer has a pecuniary interest. A lawyer should not incur such expenses unless the client has entered into a written agreement complying with paragraph (a) that contains a full disclosure of the nature and amount of the possible expenses and the relationship between the lawyer and the other entity involved. Imputed Disqualifications 9. The prohibitions imposed on an individual lawyer by this Rule are imposed by paragraph (i) upon all other lawyers while practicing with that lawyer’s firm. ## Nearby sections - [Tex. Disciplinary R. Prof. Conduct 1.01 Rule 1.01. Competent and Diligent Representation](https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_01.md) - [Tex. Disciplinary R. Prof. Conduct 1.02 Rule 1.02. Scope and Objectives of Representation](https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_02.md) - [Tex. Disciplinary R. Prof. Conduct 1.03 Rule 1.03. Communication](https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_03.md) - [Tex. Disciplinary R. Prof. Conduct 1.04 Rule 1.04. In addition, this Rule does not apply to standard commercial transactions between](https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_04.md) - [Tex. Disciplinary R. Prof. Conduct 1.05 Rule 1.05. also furnishes considerable protection to other information falling outside the scope](https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_05.md) - [Tex. Disciplinary R. Prof. Conduct 1.06 Rule 1.06. Conflict of Interest: General Rule](https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_06.md) - [Tex. Disciplinary R. Prof. Conduct 1.07 Rule 1.07. Conflict of Interest: Intermediary](https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_07.md) - [Tex. Disciplinary R. Prof. Conduct 1.08 Rule 1.08. 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Prof. Conduct 1.14 Rule 1.14. Conflicts: Public Interests Activities](https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_14.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/SRULES_TX_DISCCONDUCT_R1_04. Check the current official text before relying on it. Not legal advice.