Arbitration of Construction Disputes
Be aware of arbitration clauses in contracts.

Greater Faith Deliverance Church, Inc. v. Designtec, Inc. (Conn. App. 2004)

Background. Church construction projects often begin with the execution of contracts with an architect and a contractor. These contracts usually contain an arbitration clause requiring any disputes between the parties to be resolved through arbitration. Church leaders should be aware of these provisions, and understand that arbitration awards, no matter how undesirable or unfair from the church's perspective, are rarely overturned by the civil courts. A recent case in Connecticut illustrates these points.

Facts. A church entered into a standard "AIA" contract with an architect for the renovation of the church building. The contract dealt with the design phase of the project, and the contract price was $200,000. Within a few months after the project began the church failed to make payments due under the contract, and the architect ceased working on the project and filed a mechanic's lien against the property.

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Posted: July 1, 2005
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