Arbitration clause can prevent costly legal battles

Posted6/30/2017 6:00 AM

Most preprinted offer forms today contain an arbitration clause that can keep both parties out of court if a real estate deal goes awry.

Q. We want to make an offer on a home. The thing that is troubling us is the preprinted offer form includes a paragraph stating that any dispute that might arise between us and the sellers would have to be settled by an arbitrator rather than a judge. I have read stories about how homebuyers should never sign an arbitration clause, because it gives up their right to sue if something goes wrong. What do you think? Also, do we have to accept the arbitration clause because it's printed in the contract?


A. No, you are not obligated to agree to arbitration simply because it's in the preprinted offer form. Most offer forms today include such a boilerplate clause, but you can strike it by crossing out the paragraph, initialing the change on the page, and then having the sellers put their own initials next to yours.

Like you, I also have read many articles that suggest buyers or sellers should never sign a contract that includes an arbitration clause. But it's worth noting that many of those stories were written by lawyers, who obviously would make a lot of money if a real estate dispute were to go to court rather than to an arbitrator or mediator.

Personally, I favor arbitration clauses because they allow a nonpartisan mediator to quickly make a low-cost decision about a potential dispute rather than wrapping the home up in lengthy legal proceedings that could force both the buyer and seller to spend thousands in attorney fees and countless hours of their time.

It's also worth noting that refusing to agree to arbitration can make a seller or buyer worry about the proposed deal, in part because he or she might feel the other party will sue over the smallest thing that could go wrong.

by signing up you agree to our terms of service

If you're seriously concerned the purchase you are considering may be headed for trouble or that the seller may be dishonest, don't sign a contract -- with or without an arbitration clause -- and start looking for a different property that's offered by someone who makes you feel more comfortable.

Q. My husband and I really appreciate that you have started publishing major product recalls in your column. We didn't know our food processor was defective until you told us, because the manufacturer never did. Keep up the good work.

A. Thanks for your kind words. Several readers have sent letters like yours, but none of them came from the companies who made the defective products or the retailers who sold them.

One of the most recent recalls involves 146,000 in-sink garbage disposals made by Moen Inc. and its subsidiary, Anaheim Manufacturing Co. They were marketed under a variety of names, including Kenmore and Waste King, and were sold at retail and plumbing-supply stores from December 2015 through March of this year.


The disposals were made in China. Anaheim has received more than 20 reports of a metal component that's inside the appliances breaking loose, sometimes flying up and hurting the user.

Appliance owners should contact Anaheim, (800) 628-0797, to find if they have one of the defective models. If they do, the company will replace the disposal and have it professionally installed at no charge to the homeowner.

In a smaller but potentially more dangerous problem involving kitchen appliances, the federal Consumer Product Safety Commission and Arcelik A.S. announced a recall of roughly 6,300 electric ranges marketed under the Blomberg and Summit brands.

The electric ranges, imported from Turkey, can become energized if an inexpensive screw was not installed to secure the grounding strap during manufacturing. That poses a shock hazard to users, which the CPSC says killed a 52-year-old professional installer when he came in contact with an energized range and a grounded object.

Homeowners who have one of the popular ranges should immediately stop using it and contact Arcelik, (877) 271-1489, to schedule a free on-site inspection and any needed repairs.

Earlier, SolarWorld announced the recall of about 97,000 electrical connectors to the solar panels it sold nationwide in November and December of last year. The connectors are in a black plastic casing, which can develop microscopic cracks that allow moisture to leak into them while the system is producing electricity, thus posing a shock hazard. Contact SolarWorld, (855) 467-652,, to see if your model is affected by the recall. If so, the company will send free replacement connectors.

Q. The food bills for our growing family have soared, so we are thinking about buying a large freezer so we can buy food when it's on sale and then eat it later. But would the cost of buying the freezer and the electricity to keep it cold diminish any savings on our grocery bills?

A. Probably not. Many high-quality, energy-efficient freezers are now being offered for as little as a few hundred dollars, and the cost of buying one and keeping it running easily will be offset by the savings on your monthly grocery bills.

Steve and Annette Economides, the best-selling authors and parents of five who have been dubbed "America's Cheapest Family," are big proponents of purchasing a deep-freezer and then following the plan that you are considering now. Freezing large quantities of food when they're on sale can save the average family of four $2,000 each year, Annette Economides says.

You can find lots of money-saving tips at the couple's website, While visiting the site, also consider signing up for their free, twice-monthly email newsletter that's filled with even more financially frugal ideas.

• For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 4405, Culver City, CA 90231-4405.

© 2017, Cowles Syndicate Inc.

Article Comments
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.