How Toll Brothers Uses This Clause
Toll Brothers purchase agreements have been documented to include class action lawsuit waiver provisions. Buyers may waive the right to join or participate in class action lawsuits against the builder. This forces each buyer to pursue claims individually, which can be cost-prohibitive for defects that affect entire communities. This clause has been the subject of litigation, including Noohi v. Toll Bros., Inc..
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies. Because Toll Brothers operates across multiple states, the enforceability and practical impact of this clause varies depending on where the home is located.
As a builder operating in the upper price segments, Toll Brothers buyers may have somewhat more leverage to negotiate contract terms compared to entry-level buyers. However, the presence of this clause in standard purchase agreements means buyers should review it carefully regardless of price point.
Builder-Specific Details
Combined with Mandatory Arbitration
Combined with mandatory arbitration, buyers cannot pursue class relief in any forum.
Standardized Across Markets
Toll Brothers'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.
Negotiation Potential
Toll Brothers operates in higher price segments where buyers may have more leverage to negotiate individual contract terms. While the clause appears in standard templates, buyers of custom or semi-custom homes may have more room to request modifications.
Legal History
The following cases involve Toll Brothers's use of this clause type.
Noohi v. Toll Bros., Inc.
In a putative class action, prospective buyers alleged Toll Brothers refused to return deposits when buyers could not obtain mortgage financing. The Fourth Circuit affirmed the district court's holding that Toll Brothers' arbitration provision was unenforceable because it required the buyer — but not the seller — to submit disputes to arbitration, lacking mutuality of consideration under Maryland law. Toll Brothers petitioned the U.S. Supreme Court for review; the petition was denied.
City of Hialeah Employees' Retirement System v. Toll Brothers, Inc.
A securities fraud class action in which investors alleged Toll Brothers made misleading statements about its business being immune from adverse housing market conditions. The case, filed in 2007, settled for $25 million. The class period covered investors who purchased shares between December 9, 2004, and November 8, 2005.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Toll Brothers's operating states.
| State | Status | Note |
|---|---|---|
| California | Likely Enforceable | Class action waivers in California new construction contracts are likely enforceable when paired... |
| Texas | Likely Enforceable | Class action waivers in Texas new construction contracts are likely enforceable, particularly when... |
| Florida | Likely Enforceable | Class action waivers in Florida new construction contracts are likely enforceable when included in... |
| Arizona | Likely Enforceable | Class action waivers in Arizona new construction contracts are likely enforceable, particularly when... |
| Colorado | Likely Enforceable | Class action waivers in Colorado new construction contracts are likely enforceable when paired with... |
| Nevada | Likely Enforceable | Class action waivers in Nevada new construction contracts are likely enforceable when included in... |
| Virginia | Likely Enforceable | Class action waivers in Virginia new construction contracts are likely enforceable when paired with... |
| Maryland | Likely Enforceable | Class action waivers in Maryland new construction contracts are likely enforceable when paired with... |
| Pennsylvania | Likely Enforceable | Class action waivers in Pennsylvania new construction contracts are likely enforceable when paired... |
| New Jersey | Likely Enforceable | Class action waivers in New Jersey new construction contracts are likely enforceable when paired... |
| New York | Likely Enforceable | Class action waivers in New York new construction contracts are likely enforceable when paired with... |
| Connecticut | Likely Enforceable | Class action waivers in Connecticut new construction contracts are likely enforceable when paired... |
| North Carolina | Likely Enforceable | Class action waivers in North Carolina new construction contracts are likely enforceable when paired... |
| South Carolina | Likely Enforceable | Class action waivers in South Carolina new construction contracts are likely enforceable when paired... |
| Georgia | Likely Enforceable | Class action waivers in Georgia new construction contracts are likely enforceable, particularly when... |
| Tennessee | Likely Enforceable | Class action waivers in Tennessee new construction contracts are likely enforceable when paired with... |
| Idaho | Likely Enforceable | Class action waivers in Idaho new construction contracts are likely enforceable when paired with... |
| Washington | Likely Enforceable | Class action waivers in Washington new construction contracts are likely enforceable when paired... |
| Utah | Likely Enforceable | Class action waivers in Utah new construction contracts are likely enforceable when paired with... |
| Michigan | Likely Enforceable | Class action waivers in Michigan new construction contracts are likely enforceable when paired with... |
| Illinois | Likely Enforceable | Class action waivers in Illinois new construction contracts are likely enforceable when paired with... |
| Delaware | Likely Enforceable | Class action waivers in Delaware new construction contracts are likely enforceable when paired with... |
Related Clauses in Toll Brothers Contracts
This clause often works in combination with other provisions in Toll Brothers's purchase agreements.
Combined with mandatory arbitration, buyers cannot pursue class relief in any forum.
Individual claims under the liability cap may be too small to pursue, and class aggregation is prohibited.
What Buyers Can Do
- Understand what the class action waiver means for community-wide issues. If multiple homes in your community have the same defect, this clause prevents you from joining together to pursue a shared claim. Each buyer must pursue their claim individually.
- Document everything from the start. If you cannot join a class action, your individual claim must stand on its own. Thorough documentation from before and after closing strengthens your position.
- Review the Noohi case. The Noohi v. Toll Bros., Inc. ruling may be relevant to your situation. If you are buying a Toll Brothers 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 Toll Brothers contracts that collectively limit buyer remedies. A contract scan can identify all of them.