How Arbitration Clauses Work in Florida Construction Contracts

Buried in the back pages of many construction contracts sits a short paragraph that can decide where, how, and in front of whom your next dispute is heard. Arbitration clauses rarely get much attention when the project is new and everyone is getting along. They get a great deal of attention once a payment fight or defect claim begins.

Florida Courts Enforce These Clauses

Under section 682.02(1), Florida Statutes, a written agreement to arbitrate existing or future disputes is valid, enforceable, and irrevocable, except on the same grounds that would allow a contract to be revoked. Projects involving interstate commerce may also fall under the Federal Arbitration Act, 9 U.S.C. § 2, which takes a similar approach. In practical terms, if you signed it, expect to be held to it.

What the Clause Actually Controls

A well-drafted clause answers a lot of questions up front. A poorly drafted one leaves them for a fight later. Look for provisions on:

• Which disputes are covered, and whether the clause is broad or narrow
• Who administers the case and which rules apply
• How arbitrators are chosen, and how many there will be
• Where the hearing takes place
• Who pays fees and whether the winner recovers attorney fees
• Whether multiple related parties can be joined together

That last point matters on construction projects with owners, contractors, subcontractors, and design professionals. Under section 682.033, a court may consolidate related arbitrations in some situations, but not if the agreement prohibits consolidation.

Forcing or Fighting Arbitration

When one side files a lawsuit despite an arbitration clause, the other can ask the court to compel arbitration. Section 682.03 directs the court to order arbitration unless it finds there is no enforceable agreement, and the court may not refuse just because it thinks the claim is weak. Courts also stay the lawsuit while that question is decided. Under section 682.02, the court decides whether an agreement to arbitrate exists, while an arbitrator decides whether conditions that must be met before arbitration were satisfied.

Do Not Count on an Appeal

Arbitration is built to be fast and final. A court must vacate an award only on limited grounds under section 682.13, such as fraud, evident partiality, or an arbitrator exceeding his or her powers, and a motion to vacate generally must be filed within 90 days of notice of the award. Disagreeing with how the arbitrator weighed the evidence is not enough.

Read It Before You Sign

Check the clause during negotiation, not after a dispute. Confirm that any pre-suit steps, such as the notice and repair process for defect claims under Chapter 558, fit with the arbitration timeline, and that deadlines in the clause are realistic.

Not sure whether your contract’s arbitration clause helps or hurts you? We would be glad to read it with you. Sweeney Law, P.A. represents owners, contractors, and subcontractors, and our Fort Lauderdale construction lawyers can be reached at 954-440-3993.

Source:

m.flsenate.gov/Statutes/682.033