Contracts & ExecutionQuestion 137 of 1632

If a home improvement contract contains a binding arbitration clause, California law requires that the clause be:

a.In 8-point boldface black type, anywhere in the contract
b.Titled ARBITRATION OF DISPUTES, 10-point bold, and initialed
c.Printed in the standard type of the contract and signed
d.In 10-point bold type, binding without separate initials

Explanation

B&P §7191 requires the arbitration provision in a contract for residential work to be clearly titled ARBITRATION OF DISPUTES and set in at least 10-point roman boldface — or, in contrasting red print, at least 8-point roman boldface — with the prescribed notice immediately above the space where the parties initial their assent. Eight-point bold in ordinary black does not qualify: the smaller size is allowed only in contrasting red. The contract's standard type never qualifies. And typography alone is not enough — without the separate initials nothing records the parties' assent to arbitrate.

Law Reference: B&P Code §7191(a), §7191(b), §7191(c)

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