Binding arbitration is an alternative to the traditional Federal or State Court system used to resolve civil disputes. Most construction Contracts expressly state that all disputes are to be resolved by private binding arbitration and that the parties waive their rights to a civil jury trial. An arbitration provision is typically enforceable, especially if it is conspicuously stated in the Contract.

Binding arbitration is typically the preferred forum for resolving construction-related disputes because unlike our civil courts: (1) there is no public record of the proceeding; (2) there is no docket or backlog in arbitration and the hearing is scheduled according to the arbitrator’s and parties’ availability; (3) the parties can select an arbitrator who is experienced in construction law; (4) possible costs savings as a result of limited discovery; and (5) the decision/award is very difficult to overturn on appeal.

For residential disputes, if the parties agree or if the Contract mandates filing with the American Arbitration Association (“AAA”), then the parties can take advantage of AAA’s Home Construction Arbitration Rules, which provide special rules and procedures for resolving residential construction disputes in an expediated and cost-efficient manner.