How Sabal Homes Uses This Clause
Sabal Homes purchase agreements have been documented to include mandatory binding arbitration provisions. Disputes must go to private arbitration instead of court, typically using an arbitrator selected through a process the builder influences. Buyers lose their right to a jury trial, public proceedings, and in many cases the ability to appeal an unfavorable decision.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies. The South Carolina Supreme Court found a similar arbitration provision to be a contract of adhesion in Smith v. D.R. Horton, Inc. (2016).
As a Lowcountry regional builder operating in Charleston, Mount Pleasant, and Summerville, Sabal Homes' contract templates are generally consistent across its markets.
Builder-Specific Details
Combined with Class Action Waiver
The arbitration clause and class action waiver work together to ensure all disputes are handled individually in private proceedings.
Smith v. D.R. Horton Precedent
The South Carolina Supreme Court found a similar arbitration agreement to be a contract of adhesion in Smith v. D.R. Horton, Inc. (2016), noting the extreme disparity in bargaining power. This precedent may affect the enforceability of Sabal Homes' arbitration clause.
Standard Form Contract
This clause appears in Sabal Homes' 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 Sabal Homes's use of this clause type.
Smith v. D.R. Horton, Inc.
The South Carolina Supreme Court found several contract provisions unconscionable, including the arbitration agreement, which the court found to be 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 Sabal Homes's operating states.
| State | Status | Note |
|---|---|---|
| South Carolina | Uncertain | The enforceability of mandatory arbitration clauses in South Carolina new construction contracts is uncertain following the Smith v. D.R. Horton, Inc. (2016) decision. The South Carolina Supreme Court found the arbitration agreement was a contract of adhesion, noting the extreme disparity in bargaining power. While arbitration clauses are not automatically invalid, the Smith decision provides precedent for challenging overly one-sided provisions. |
Related Clauses in Sabal Homes Contracts
This clause often works in combination with other provisions in Sabal Homes's purchase agreements.
The class action waiver and arbitration clause work together to ensure all disputes are handled individually in private proceedings.
Disputes over deposit forfeiture must be resolved through arbitration, where the cost of pursuing a claim may exceed the deposit amount.
Challenges to the habitability waiver must be pursued in arbitration rather than court.
What Buyers Can Do
- Understand the Smith v. D.R. Horton precedent. The South Carolina Supreme Court found a similar arbitration provision to be a contract of adhesion in 2016. This precedent may affect the enforceability of the arbitration clause in your Sabal Homes contract.
- Understand the arbitration process before signing. Review which arbitration provider is specified, who selects the arbitrator, and whether you have any right to appeal. These details significantly affect the fairness of the process.
- Have the full contract scanned before signing. This clause is often one of several interconnected provisions in Sabal Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.