Enforceability Status
Mandatory arbitration clauses in Missouri new construction contracts are likely enforceable. Missouri has adopted the Missouri Uniform Arbitration Act (Mo. Rev. Stat. sections 435.350-435.470) and courts generally uphold arbitration agreements. The Federal Arbitration Act provides preemptive support for contracts involving interstate commerce.
Legal Analysis
The Federal Arbitration Act (FAA), 9 U.S.C. sections 1-16, applies to arbitration agreements in contracts involving interstate commerce. National homebuilders operating in Missouri engage in interstate commerce, placing their contracts within the FAA's scope. The FAA establishes a strong presumption in favor of enforcing arbitration agreements.
Missouri's Uniform Arbitration Act, codified at Mo. Rev. Stat. sections 435.350-435.470, provides that written agreements to arbitrate are valid, enforceable, and irrevocable except upon grounds that exist for the revocation of any contract. Missouri courts have applied this framework to uphold arbitration provisions in various contexts.
Missouri does not have a comprehensive construction defect statute with pre-litigation notice and cure requirements. Construction defect claims are generally governed by common law principles, including breach of contract, negligence, and implied warranty theories. Contractual arbitration provisions play a significant role in shaping how disputes are resolved.
Missouri courts have addressed unconscionability in the arbitration context. In Brewer v. Missouri Title Loans (Mo. 2012), the Missouri Supreme Court applied unconscionability analysis to an arbitration agreement. Missouri courts recognize both procedural and substantive unconscionability as defenses but have generally applied these defenses narrowly in the arbitration context.
Relevant Missouri Law
Establishes a national policy favoring arbitration and preempts conflicting state laws.
Provides the statutory framework for enforcement of arbitration agreements in Missouri.
Related Cases
The Missouri Supreme Court addressed unconscionability in the context of an arbitration agreement, applying both procedural and substantive unconscionability analysis.
Builders in Missouri Using This Clause
What Missouri Buyers Should Know
- Review the Arbitration Clause Before Signing Missouri does not have a specific construction defect statute, so the arbitration clause terms are especially important. Examine the scope, provider, fees, and limitations.
- Assess the Clause for Unconscionable Terms Missouri courts will examine arbitration provisions for unconscionability. Terms that are significantly one-sided or impose excessive costs on the buyer may be subject to challenge.
- Evaluate Fee Allocation Review how arbitration costs are divided between the buyer and builder. The cost structure may affect the practical ability to pursue claims.
- Document All Construction Issues Maintain detailed records of defects, repair requests, and communications. Arbitration discovery is typically limited, making contemporaneous documentation critical.