What is Mandatory Arbitration?

Before you hire a contractor to perform foundation repairs on your home’s foundation, you must understand a critical term. This term may show up in the contract you’ll be asked to sign, and it’s important to understand why it’s so pivotal. Known as “Mandatory Arbitration,” this term is found in the clauses of many Texas foundation repair contracts, and if it’s in the agreement you are being asked to sign, don’t sign it! Mandatory arbitration is not in your best interests as a consumer, and unfortunately, far too many homeowners fail to understand this before work begins on their home.

Binding Mandatory Arbitration (BMA) clauses are presented to consumers as solutions to potential disputes between a consumer, such as yourself, and a contractor. The theory is that if you have a problem with the repair work when performed, you will have a convenient option of meeting with an arbitrator, supposedly neutral, who will help solve the dispute in an impartial and fair way without having to file a lawsuit against the company. Consumers are told that this will save them considerable money and time in having any problems resolved.

However, there are several realities to consider in understanding the problems with BMA clauses.

  • Mandatory arbitration rulings are final, and they cannot be appealed.
  • The arbitrators are chosen by the company who has done the work, not by the consumer.
  • If the consumer loses the arbitration ruling, the consumer can be held liable for the expenses of the company in addition to their own expenses.
  • Arbitrators are not required to explain their rulings or the reasons they decide in favor of one party over another.
  • In many cases, the cost of arbitration ends up being higher than the cost of a lawsuit due to a variety of expenses that can be charged to the consumer under the blanket term, “Arbitration Expenses.”
  • More than 90% of arbitration cases are lost by consumers and won by the companies they’ve met in arbitration.
  • There is no judge, no jury, no appeal, and no public record in a mandatory arbitration ruling.
  • Arbitration companies are “for profit” and touted by big businesses.

Mandatory Arbitration or BMA clauses may show up in contracts by other similar names, so it’s important to read any contracts carefully before hiring a foundation repair company. Any clause in a contract that takes away your right to seek legal resolution is a contract that should not be signed.

Dawson Foundation Repair does NOT include Mandatory Arbitration clauses in our agreements with our customers. We believe that they are unfair, and are designed to protect companies performing less-than-reliable workmanship. Because we believe that Bell Bottom Piers provide the only proven method of foundation repair, and because it is the only method of repair we offer, we invite you to review our record with the Better Business Bureau or ask us about our Lifetime Service Agreement. We service homes and commercial businesses all over Texas and we have been doing so without mandatory arbitration since 1984.

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