How D.R. Horton Uses This Clause
D.R. Horton purchase agreements have been documented to include limitation of liability / no monetary damages provisions. The builder limits or eliminates liability for monetary damages resulting from construction defects, delays, or contract breaches. Even if a court or arbitrator finds the builder at fault, the buyer may recover little or nothing beyond the original purchase price. This clause has been the subject of litigation, including Smith v. D.R. Horton, Inc..
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies. Because D.R. Horton operates across multiple states, the enforceability and practical impact of this clause varies depending on where the home is located.
D.R. Horton's scale means contract templates are largely standardized across its operations. A clause identified in one market's contract is likely present in other markets' contracts, though local addenda may modify the terms.
Builder-Specific Details
Combined with Habitability Waiver
Together these clauses eliminate both the legal standard (habitability) and the remedy (damages).
Standardized Across Markets
D.R. Horton's scale means contract templates are largely standardized across its operations. This clause identified in one state's contract is likely present in other states' contracts, though local addenda may modify the terms.
Standard Form Contract
This clause appears in D.R. Horton's standard purchase agreement, which is generally presented on a take-it-or-leave-it basis. Buyers typically have limited ability to negotiate individual terms, though making the request in writing is still advisable.
Legal History
The following cases involve D.R. Horton's use of this clause type.
Smith v. D.R. Horton, Inc.
The South Carolina Supreme Court found several contract provisions unconscionable, including language stating the builder "shall not be liable for monetary damages of any kind" and a waiver of the implied warranty of habitability. The court also found the arbitration agreement was a contract of adhesion, noting the extreme imbalance of bargaining power between the national builder and individual homebuyers.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects D.R. Horton's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Uncertain | Texas courts generally enforce contractual liability limitations but subject them to... |
| Florida | Uncertain | Florida law imposes statutory protections for construction defect claims under Chapter 558 that may... |
| South Carolina | Likely Unenforceable | South Carolina courts have found similar builder contract provisions unconscionable. In Smith v.... |
| North Carolina | Uncertain | North Carolina recognizes the implied warranty of habitability for new construction and has... |
| Arizona | Uncertain | Arizona's Purchaser Dwelling Act provides statutory remedies for construction defects that exist... |
| Georgia | Uncertain | Georgia law permits contractual limitation of liability but subjects such clauses to... |
| Colorado | Likely Unenforceable | Colorado's Construction Defect Action Reform Act (CDARA) and the Homeowner Protection Act of 2007... |
| Nevada | Likely Unenforceable | Nevada has among the strongest statutory protections for new home buyers in the nation. NRS Chapter... |
| California | Likely Unenforceable | California provides strong statutory protections for homebuyers under the Right to Repair Act (SB... |
| Virginia | Uncertain | Virginia generally enforces contractual liability limitations but recognizes the implied warranty of... |
| Tennessee | Uncertain | Tennessee recognizes the implied warranty of habitability and has consumer protection statutes that... |
| Alabama | Uncertain | Alabama recognizes the implied warranty of habitability for new construction and has consumer... |
| Maryland | Uncertain | Maryland recognizes the implied warranty of habitability and has consumer protection statutes that... |
| Louisiana | Likely Unenforceable | Louisiana's civil law system provides strong statutory protections for homebuyers through the New... |
| Hawaii | Likely Unenforceable | Hawaii has strong consumer protection statutes and recognizes the implied warranty of habitability.... |
Related Clauses in D.R. Horton Contracts
This clause often works in combination with other provisions in D.R. Horton's purchase agreements.
Together these clauses eliminate both the legal standard (habitability) and the remedy (damages).
Arbitrators may be bound by the contractual damage limitation, further restricting buyer recovery.
Individual claims under the liability cap may be too small to pursue, and class aggregation is prohibited.
The damage cap limits recovery even for items covered by the express warranty.
What Buyers Can Do
- Understand what damages are excluded. The limitation may cover consequential damages, incidental damages, or all monetary damages beyond the purchase price. The scope of the limitation matters significantly.
- Ask whether the limitation applies to construction defects. Some liability limitations are drafted broadly enough to encompass defect claims. Clarify whether defect-related damages are capped or excluded.
- Review the Smith case. The Smith v. D.R. Horton, Inc. ruling may be relevant to your situation. If you are buying a D.R. Horton home in a state with similar legal protections, this precedent could affect the enforceability of this clause.
- Have the full contract scanned before signing. This clause is often one of several interconnected provisions in D.R. Horton contracts that collectively limit buyer remedies. A contract scan can identify all of them.