Under Bus. & Prof. Code §7191, a residential construction contract that contains a binding arbitration clause must:
Explanation
§7191(b) requires that, immediately after the arbitration provision and immediately before the space where the parties initial their assent, the contract carry the statutory NOTICE in capital letters, telling the owner that agreeing to arbitration gives up the right to a court or jury trial, to discovery and to appeal, and that the agreement is voluntary. (b) makes that notice optional; it is mandatory whenever the clause appears. (a) invents a filing step — CSLB does not review or file private contracts. (c) invents a forum mandate; §7191 regulates how the clause is presented, not who arbitrates. A clause that does not comply is unenforceable against anyone other than the licensee (§7191(c)) — the contractor stays bound either way.
Law Reference: Bus. & Prof. Code §7191(b)-(c)This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
Practice all 1632 questions free — no signup required.
Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →
Related questions on this topic
- A subcontract requires the sub to name the prime contractor and owner as ADDITIONAL INSUREDS on the sub's commercial general liability policy AND to provide a WAIVER OF SUBROGATION. The PRIMARY purpose of the waiver of subrogation is to:
- Under Bus. & Prof. Code §7159, a residential home improvement contract for $500 or more must include, in close proximity to the signature line, a notice informing the owner of the right to:
- A change order on a home improvement contract is enforceable only if it is:
- Bus. & Prof. Code §7159 requires home improvement contracts to include the approximate dates when work will begin and when it will be substantially complete. If the contractor fails to commence the work within a reasonable time from the agreed start date, the consumer's primary remedy is to:
- An $80,000 residential remodel contract contains both a binding arbitration clause and a separate mandatory mediation clause. Under B&P §7191, the MEDIATION clause must:
- Under California's Right to Repair Act (Civil Code §895 et seq., enacted by SB 800), what is the general statute of limitations for a homeowner to bring a construction defect claim against the builder for a function/use defect not otherwise specified?
Last reviewed: · editorial process