Enforceability Status
Mandatory arbitration clauses in Washington new construction contracts are likely enforceable. Washington has adopted the Washington Uniform Arbitration Act (RCW Ch. 7.04A) and maintains a policy favoring arbitration. Washington's construction defect statute (RCW Ch. 64.50) establishes pre-litigation requirements that operate alongside contractual arbitration provisions.
Legal Analysis
The Federal Arbitration Act (FAA), 9 U.S.C. sections 1-16, applies to arbitration agreements in contracts involving interstate commerce and establishes a presumption of enforceability. National homebuilders operating in Washington typically satisfy the interstate commerce requirement, bringing their contracts within the FAA's scope.
Washington adopted the Revised Uniform Arbitration Act in 2005, codified at RCW Chapter 7.04A. The statute provides that an agreement to arbitrate is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract. Washington courts have consistently applied this framework to uphold arbitration agreements.
Washington's construction defect statute, RCW Chapter 64.50 (Building and Construction Defects), establishes a pre-litigation notice and cure process for residential construction claims. Homeowners must provide written notice to the builder and allow an opportunity to inspect and offer to cure before filing suit. This statutory process is independent of contractual arbitration and may need to be satisfied before initiating arbitration proceedings.
Washington courts have addressed unconscionability in the arbitration context. In Zuver v. Airtouch Communications, Inc. (2004), the Washington Supreme Court established a framework for analyzing unconscionability in arbitration agreements. While the court recognized that adhesion contracts containing arbitration clauses may be subject to heightened scrutiny, it also acknowledged that merely being an adhesion contract does not render an arbitration provision unenforceable.
Relevant Washington Law
Establishes a national policy favoring arbitration and preempts conflicting state laws.
Provides the statutory framework for enforcement of arbitration agreements in Washington.
Establishes pre-litigation notice and cure requirements for residential construction defect claims.
Related Cases
The Washington Supreme Court established the framework for unconscionability analysis of arbitration agreements, requiring both procedural and substantive unconscionability.
Builders in Washington Using This Clause
What Washington Buyers Should Know
- Comply with RCW 64.50 Pre-Litigation Requirements Washington law requires written notice to the builder and an opportunity to inspect and cure defects before pursuing claims. These requirements may need to be satisfied before initiating arbitration.
- Review the Arbitration Clause for Unconscionable Terms Washington courts scrutinize arbitration provisions for both procedural and substantive unconscionability. Terms that unreasonably limit remedies or impose excessive costs on the buyer may be subject to challenge.
- Understand the Scope of Covered Disputes Determine which types of disputes are subject to arbitration, including whether warranty claims, construction defect claims, and statutory claims are covered.
- Document All Construction Defects Thoroughly Maintain detailed records of defects, inspection reports, and communications with the builder. This documentation is essential for both the statutory notice process and any subsequent arbitration.