Arbitration Clauses—Where will you be arbitrating?

 

I had the pleasure of speaking at the National Association of the Remodeling Industry (NARI) Education Day earlier this month. During my presentation, “The Myth of the One Year Warranty”, we discussed the impact of arbitration clauses in construction contracts and who should act as arbitrator.

While the American Arbitration Association is certainly a popular forum, there are others.  For example, the New York Times recently wrote about a hardwood supplier, Higuera Hardwoods, in Washington State that requires arbitration before the Institute for Christian Conciliation, a division of Peacemaker Ministries.  This organization has adopted Conciliation Rules of Procedure, the purpose of which is to

glorify God by helping people to resolve disputes in a conciliatory rather than an adversarial manner

The rules further provide that it will consider the state, federal and local laws brought to its attention, but

the Holy Scriptures (the Bible) shall be the supreme authority governing every aspect of the conciliation process.

I don’t honestly know how a dispute about the hardwood product would be resolved relying on biblical principles.  But, if you purchase hardwood from this company, you will be obligated to find out.

Take Away: Arbitration clauses will impact how your dispute will be resolved.  Make sure you review the arbitration clause so that you know how your dispute will be resolved before you sign the contract.

 

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