How Perry Homes Uses This Clause
Perry Homes purchase agreements have been documented to include mandatory binding arbitration provisions. Disputes must go to private arbitration instead of court, and buyers lose their right to a jury trial and in many cases the ability to appeal an unfavorable decision.
Arbitration proceedings are typically conducted under rules selected by the builder, with limited discovery, no public record, and restricted grounds for appeal. The arbitrator's decision is generally final and binding.
The Texas Supreme Court addressed Perry Homes' arbitration practices in the landmark case Perry Homes v. Cull (2008), holding that Perry Homes waived its right to compel arbitration by substantially invoking the judicial process. This case established an important precedent for arbitration waiver analysis in Texas.
Builder-Specific Details
Perry Homes v. Cull (2008) Precedent
The Texas Supreme Court held that Perry Homes waived its arbitration right through extensive participation in litigation. This landmark case established the standard for analyzing when a party has substantially invoked the judicial process to the other party's detriment.
Combined with Class Action Waiver
The arbitration clause typically includes a class action waiver, preventing buyers from joining together to pursue claims collectively.
Legal History
The following cases involve Perry Homes's use of this clause type.
Perry Homes v. Cull
The Texas Supreme Court held that Perry Homes waived its right to compel arbitration by substantially invoking the judicial process through extensive participation in litigation.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Perry Homes's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Likely Enforceable | Texas courts have generally upheld mandatory arbitration clauses in residential construction contracts under the Texas Arbitration Act and the Federal Arbitration Act. However, Perry Homes v. Cull (2008) established that the right to compel arbitration can be waived through substantial participation in litigation. |
Related Clauses in Perry Homes Contracts
This clause often works in combination with other provisions in Perry Homes's purchase agreements.
The class action waiver is typically embedded within or adjacent to the arbitration clause, preventing collective claims.
Disputes over habitability issues must be resolved through arbitration rather than court.
What Buyers Can Do
- Understand what you are waiving. Signing a mandatory arbitration clause means waiving your right to a jury trial, limiting your ability to appeal, and agreeing to a private dispute resolution process with restricted discovery.
- Review the arbitration rules specified in the contract. The contract typically specifies which arbitration rules will govern disputes. Review these rules to understand the process, costs, and limitations before signing.
- Have the full contract scanned before signing. This clause is often one of several interconnected provisions in Perry Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.