House Bill Prohibits Pre-Dispute Arbitration in Consumer Contracts

Advocacy Icon
Acting against the strong objections of NAHB, the House today approved the Forced Arbitration Injustice Repeal Act (H.R. 1423), legislation that would prohibit two parties from including in a contract a pre-dispute arbitration agreement. NAHB strongly supports the use of alternative dispute resolution (ADR), including binding arbitration, in consumer contracts. NAHB has found that ADR is often the most rapid, fair and cost-effective means to resolving trade disputes – for the both the builder and buyer – arising out of the construction and/or sale of the home. In contract, litigation is expensive, time consuming and unlikely to produce the desired result – getting the problem repaired. For the home buyer, the use of arbitration also provides them with certainty that any dispute will be resolved in a quick, fair and less costly manner than litigation. NAHB members have priced their products based on an agreed-upon contract. Because arbitration allows businesses to contain their legal costs, those savings are often included in the price of the product. Prior to the House vote, NAHB sent a letter to House members detailing our concerns with the bill and designated opposition to the legislation as a "key vote" because of its importance to the housing community. For more information, contact Alex Strong at 800-368-5242 x8279.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe