Q: Does refusal to adhere to a 5-year workmanship warranty create breach of contract and void the required arbitration?
Extensive damage occurred in my house after work was done by a company. The damage was undetected for almost four years due to its location. Once found, expensive repairs were required. Three outside specialists confirmed the cause of damage was the poor workmanship. The company refuses to pay any damages. By refusing to honor the contractual 5-year workmanship warranty, is the entire contract breached? If so does that void the required binding arbitration clause?
A: If I read correctly, you do not want to go through arbitration and you want to use "breach of entire contract" as a ground to avoid arbitration. Well, this is a not a legal concept. I strongly suggest you to have a business lawyer to review your contract and find a right way to avoid arbitration, if there is.
A:
You ask a very good question and one that I have been asked many times. An arbitration provision is valid even if the contract involved fraud. In other words, simply because fraud was involved in the transaction, that does not void the manner in which you have agreed to resolve the dispute. This is called the doctrine of severability. Namely, the arbitration provision is considered separately from the agreement terms.
Accordingly, you may institute arbitration proceedings to prosecute your claim for fraud. The only time that a Court will disregard the arbitration provision is if the provision itself was fraudulent.
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