Beware of Waiving Your Arbitration Rights Through Your Conduct

Contractors are no strangers to arbitration or mediation clauses in development contracts.  These provisions plainly determine the course of action for dispute resolution at the outset of a job somewhat than acquiring to deal with disputes around how to resolve disputes.  Nevertheless, a new circumstance in Florida illustrates the importance of adhering to the requirements of these provisions to secure your legal rights.

In Leder v. Imburgia Constr. Servs., 325 So. 3d 256 (Fla. Dist. Ct. App. 2021), the plaintiff home owners contracted with the defendant general contractor to execute renovations on the home.  The agreement demanded the parties to post any disputes to an Original Decision Maker in just 21 days of the when the dispute arose and then furnished for arbitration.

In this situation, following a dispute arose concerning a change get, the common contractor walked off the job and the householders filed a lawsuit for breach of deal.  In response, the contractor submitted a motion to dismiss the lawsuit, arguing the lawsuit was inappropriate presented the arbitration provision in the contract.  The trial court agreed and dismissed the homeowner’s lawsuit.

On enchantment, the Florida Court of Appeals appeared to the language of the arbitration provision and the parties’ carry out.  The Court docket noted that neither party had submitted a assert to the Original Selection maker in 21 days of dispute and as a result failed to adhere to the necessities of the arbitration provision.  The Court docket determined by failing to adhere to these specifications, the two events experienced waived their ideal enforce the arbitration of the agreement and the homeowners’ lawsuit was wrongfully dismissed.

Leder illustrates that it is critical to follow the conditions of an arbitration or mediation clause within just a agreement in purchase to keep the protections individuals clauses offer you in the party of a dispute.  Failure to observe these types of phrases can act as a waiver of the clause completely, subjecting the waiving party to litigation somewhat than the at first meant dispute resolution method.  Make absolutely sure to detect any arbitration or mediation clauses in your current or potential contracts, primarily the prerequisites laid out inside those provisions in the party of a dispute.

This write-up was created by Seth McCauley.