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- Title
An Unconscionable Clause.
- Abstract
This section discusses the case D.R. Horton Inc. v. Green, a construction defect dispute case that was filed in Nevada in 2004. A construction defect dispute arose between the parties, and after mediation failed, Horton demanded arbitration. The buyers answered and then sued Horton, seeking to have the arbitration clause declared unenforceable. The district court held that since the buyers had no realistic bargaining power, the arbitration clause was procedurally unconscionable. It also held that the agreement failed to disclose that by agreeing to arbitrate, the buyers were giving up significant state law rights. This made the agreement substantively unconscionable. On de novo review, the Nevada Supreme Court affirmed. But it found that the facts did not support a finding that the buyers had unequal bargaining power, even though there was a large disparity between the parties' financial strength. Nevertheless, the court held that the arbitration clause was procedurally unconscionable because it was inconspicuous, nothing drew attention to its importance, and the agreement failed to put the buyers on notice that they were agreeing to forgo important legal rights.
- Subjects
NEVADA; D.R. Horton Inc.; ARBITRATION (Administrative law); MEDIATION; DISPUTE resolution; ACTIONS &; defenses (Law)
- Publication
Dispute Resolution Journal, 2004, Vol 59, Issue 4, p90
- ISSN
1074-8105
- Publication type
Article