When they are seeking remedies for construction defects, arbitration clauses and non-disclosure agreements in Nevada construction disputes can potentially harm the rights of homeowners. Consumers are at a disadvantage when they arbitrate their claims instead of pursuing legal remedies in court while proponents of arbitration clauses claim that they help to make the claims process faster and protect both builders and homeowners. Being that they have the effect of keeping disputes and outcomes out of the public’s eye, arbitration agreements and NDAs are commonly used in the construction industry. Concerning the workmanship and quality of a builder, this means other consumers may not have good information. With this in mind, we at Kajioka & Associates, Attorneys at Law would like to continue on the subject.
Problems of Arbitration Agreements
Instead of through a court of law, arbitration clauses mandate that the parties to the contract settle their disputes in arbitration. To waive their right to a jury trial, these types of provisions force consumers. Arbitration is held outside of the court process while court proceedings are a matter of public record. Supposedly being neutral, arbitrators are third parties, however when an arbitrator issues a decision, the matter is final, binding, and usually confidential. Not having further legal redress available to the individual, this means that a consumer who is unhappy with the outcome of arbitration has no recourse. Because the builder will often choose someone who they know and have probably had experience within the past, the construction company will get to choose the arbitrator and set the terms of the process through the sales contract, placing the homeowner at a greater disadvantage. In addition to being more likely to issue rulings that favor the company over the homeowners during disputes. Worth far less than what they would otherwise be entitled to recover in court, this frequently leads to consumers receiving arbitration verdicts. Without even knowing the rights that they are waiving consumers will sign arbitration clauses as part of their purchase agreement unfortunately.
Arbitration Plus Non-Disclosure Agreements
The parties can still talk about what occurred unless they are prohibited from doing so by non-disclosure agreements while the proceedings in arbitration are often held in secret. To sign non-disclosure agreements that will include unreasonable confidentiality provisions in proposed settlement agreements, construction companies may offer unreasonably low settlements in exchange for the consumers’ agreement. Though they will be prohibited from discussing the settlement or what happened in their case when a consumer signs an NDA. Potentially leading to harm, this prevents others from understanding the nature of the company’s work and its history. Though they should carefully review everything that is contained in the proposed contracts and strongly consider consulting an attorney prior to signing such a contract, before people enter into contracts to build or purchase homes. It should be reviewed to see if there is any limiting language that might conflict with state law if a company offers a warranty. With arbitration or NDA provisions that limit one’s rights, careful consideration should be given before signing any contract.