The Georgia Court of Appeals in Harrison v. Eberhardt (A07A0894; Sept. 14, 2007), affirmed the arbitration award entered after the Wilkes County Superior Court granted a motion to compel arbitration related to a home purchase. The arbitrator found the seller responsible for certain repairs to defects in the home. The trial court, presented with the award for enforcement, rejected the buyer’s argument that certain additional claims related to the seller’s failure to provide potable water, etc., were not subject to the arbitration clause. The court of appeals agreed with the trial court and specifically found that the sale agreement’s reference to and adoption of the Federal Arbitration Act preempted the requirement under Georgia law that the parties to a contract separately initial an arbitration clause for it to be enforceable. Businesses and individuals should proceed with caution when using/signing contracts or other agreements which contain arbitration clauses. While arbitration is often thought of as a cost-effective, fast and more predictable alternative to trial by jury, the appropriateness of an arbitration clause and the advisability of employing such clauses should be evaluated before injecting them into form contract documents or signing agreements which contain them. You may want to consider consulting with an attorney with the business and litigation experience needed to evaluate these clauses, before they are signed.
Denny Brown heads Buckley Brown’s commercial practice and can assist you or your company in assessing the advisability of using arbitration clauses.
For more information, please contact Denny Brown at (404) 974-4571.
