Arbitration provisions are standard fare in a variety of contractual settings. In some cases, arbitration provisions make a lot of sense. Arbitration is a streamlined dispute resolution process, with limited discovery, that often leads to the swift and equitable resolution of disputes. Arbitration provisions can also act as a sword and a shield for the corporations that include these provisions in their employment agreements and other contracts. Similarly, in our day-to-day practice we see a pattern of builders employing arbitration provisions designed to prevent, or severely limit, a homeowner’s ability to recover against a builder who builds and sells a defectively constructed home.

Nonstandard Arbitration Forums

While arbitration clauses are common within real estate sale contracts and warranty documents, the forum chosen by builders can be surprising.  We have seen cases where the contractually mandated arbitrator does not live, nor holds a law license, in the state where the home and parties are located. Consequently, our attorneys have also had the experience of conducting arbitration proceedings over the phone.