Enforceability Status
Class action waivers in Michigan new construction contracts are likely enforceable when paired with arbitration agreements. The FAA preempts state-law challenges under AT&T Mobility LLC v. Concepcion (2011). Michigan courts have generally upheld arbitration provisions in consumer contracts, and the state's Consumer Protection Act provides individual remedies.
Legal Analysis
The Federal Arbitration Act (9 U.S.C. §§ 1-16) establishes a strong presumption in favor of arbitration agreements, including class action waivers. Under AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the FAA preempts state rules conditioning arbitration on the availability of class-wide procedures. Michigan courts follow this federal precedent.
Michigan's arbitration statutes (MCL §§ 600.5001-600.5035) provide a framework for enforcing arbitration agreements. Michigan courts have upheld arbitration provisions in consumer contracts and have not developed a specific exception for class action waivers in the residential construction context.
Michigan applies unconscionability analysis under both common law and statutory provisions. Both procedural and substantive unconscionability must be demonstrated. Michigan courts have generally followed the national trend of enforcing class action waivers post-Concepcion when they are part of an arbitration agreement.
Michigan's Consumer Protection Act (MCL § 445.901 et seq.) provides individual remedies for unfair, unconscionable, or deceptive practices in consumer transactions. This statute provides for actual damages, attorney fees, and in some cases enhanced damages. These remedies remain available to buyers regardless of any class action waiver.
Relevant Michigan Law
Establishes a strong federal policy favoring arbitration agreements and preempts state laws that single out arbitration provisions for disfavored treatment.
Governs arbitration agreements in Michigan and provides for the enforcement of written arbitration agreements.
Prohibits unfair, unconscionable, or deceptive practices in consumer transactions and provides individual remedies including actual damages and attorney fees.
Builders in Michigan Using This Clause
What Michigan Buyers Should Know
- Individual remedies under the Consumer Protection Act Michigan's Consumer Protection Act provides individual remedies for deceptive practices, including actual damages and attorney fees, that are available regardless of any class action waiver.
- Review the full arbitration provision Understand the entire arbitration clause, including cost allocation and arbitration provider, in addition to the class action waiver.
- Document all construction defects Maintain detailed records of defects, warranty requests, and builder communications to support any individual claim.
- Consult a Michigan real estate attorney An attorney can evaluate the specific class action waiver language and advise on enforceability and your individual rights.