National Roofing Legal Resource Center

Contract provision to provide roofing contractor with opportunity to appeal dispute resolution decision issued by "decision maker" designated by contract

Beware of contracts that contain a provision that states a person or entity affiliated or retained by the other party is to make the final binding decisions in project-related disputes. Some construction contracts, particularly contracts for state and municipal projects, will contain a provision that provides any project-related claims or disputes that arise between the parties will be decided by an entity affiliated with the Owner. Sometimes, this may be the architect or an official within the governmental agency. Although such a provision can be beneficial for efficient resolution of disputes with other subcontractors or the prime contractor on projects that are not design/build, it is easy to imagine why a roofing contractor would not want to be bound by the decision of a person affiliated or retained by the other party in the dispute. A roofing contractor should include in its contract a provision similar to the one below, which provides the roofing contractor with the right to appeal any decision made by a person or entity affiliated or retained by the other party. A provision such as the one below will help ensure a roofing contractor is not contractually bound by a decision made in an unfair dispute resolution process.

Opportunity to Appeal Dispute Resolution Decision Issued by "Decision Maker" Designated by Contract: If this contract contains a provision stating that one of the parties, its architect or consultant, or an entity related or affiliated with one of the parties is to make a decision in the event of a dispute between the parties, it is understood and agreed that such a decision is not a final and binding decision. All parties reserve and have the right to have final and binding decisions on disputes ultimately decided either through civil litigation in the courts where the project is located or through arbitration, which is to be conducted in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association or with another neutral entity mutually agreed upon by the parties.


6/23/2018



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