Arbitration Provision in Contract Found to be Unenforceable

A recent non-precedential Appellate Division case serves as a reminder that not all arbitration provisions are drafted equally. At issue in a residential construction suit was the defendant-contractor's arbitration provision which required an aggrieved homeowner to file a claim with the American Arbitration Association in lieu of filing an action in court. However, the provision at issue did not contain specific language which would have informed a reasonable homeowner that by going to arbitration they would be "waiving a right to seek relief in a court of law." (see Atalese v. U.S. Legal Servs. Grp., 219 N.J. 430 (2014)).  This proved fatal to the defendant-contractor's invocation of arbitration, and the defendant-contractor's motion to compel arbitration was reversed and the matter remanded to the trial court for (expensive) litigation. This serves as a reminder for all businesses and individuals with arbitration clauses in their contracts to have same reviewed by an attorney knowledgeable on the subject matter.  (Becker v. Ollie Slocum and Son, Inc.)