Contracts & ExecutionQuestion 652 of 1605
A residential remodel contract for $80,000 includes a binding arbitration clause and, in addition, a separate mandatory mediation clause. Under Bus. & Prof. Code §7191, what is required for the MEDIATION clause specifically (as distinct from arbitration)?
a.Mediation clauses must be initialed by both spouses if the owners are married
b.The mediation clause must be filed with the CSLB before signing
c.The mediation clause must appear in the contract, but §7191's 10-point bold, capitalized, separately initialed disclosure requirements specifically apply to ARBITRATION provisions (which waive a jury trial); mediation does not waive trial rights and is not subject to the §7191 initialing rule
d.Mediation is prohibited in residential construction contracts unless approved by AAA
Explanation
Bus. & Prof. Code §7191's special 10-point boldface, capitalized, separately initialed disclosure rule is triggered by ARBITRATION clauses because they waive the constitutional right to a court/jury trial. Mediation, by contrast, is non-binding and preserves the right to litigate, so §7191's disclosure requirements do not attach to a mediation-only provision. The CSLB does not pre-file private contracts; there is no requirement to choose AAA for mediation; and spousal initialing is not a statutory requirement. Confusing mediation with arbitration for §7191 purposes is a classic exam trap.
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