One of the plumbing contractors (a bigger company) that gave me an
estimate for a water heater has a clause about Alternative Dispute
Resolution in the contract. Basically it says that they use an
arbitrator to settle all disputes. It says I would waive my right to
a lawsuit unless the amount were small enough for small claims
Their price is good for the heater, but I'm concerned about signing
away my right to sue. Any reason I should go along with this clause,
or should I tell them I will take my business elsewhere if the clause
Alternative Dispute Resolution isn't exactly giving up your right to
sue. It just means you can't sue them in regular court. You have to
present your case to an aribitrator. So the key issue here is: does
the contract state that the arbitrator is from the American
Arbitration Association? If so, those arbitrators are usually former
judges, court referees, or law professors--so you usually get a fair
hearing. If it's another unheard of arbitrator, you might want to
check out their history. So of them aren't exactly "unbiased."
On the other hand, if you're using a licensed contractor and they pull
a permit, I doubt you'll have anything to sue over. A water heater
install is pretty cut and dried.
The clause does specifically say that I am waiving my right to sue,
except for small claims.
I'm also considering a special valve (like the Waggs except
resettable...assuming they don't only install the wags) and I'm also
considering a PRV valve (one that allows backflow).
I look at arbitration like the plague. There is little case law that
will enable you to predict the outcome. Also, the result seems to be
biased in favor of whichever party is likely to continue to employ
I testify as an expert witness and feel that law or personal opinion,
not justice, is dispensed more often in arbitrations than in courts.
For a simple, routine, low cost job like this, just get the damned thing
done. How much can you sue them for? $300? If you trust them, get it
done, otherwise move on. I'd probably not want to work for you.
Well, I haven't sued anyone yet...just don't want to sign away that
The simple low cost job will wind up costing me at least $1600. (the
heater plus special waggs (or watts) shutoff plus a Watts PRV valve
that allows backflow) And that price doesn't include the extra $76 in
"protection money" that my town charges me for the permit.
I live in North NJ and prices are expensive around here.
I remember the good ole' days 15 or 20 years ago when a water heater
only cost a mere $300. Today a water heater costs around triple what
it used to cost and will probably last half as long .
If you're not comfortable with the arbitration clause, then just get
another plumber. There's no shortage of options when it comes to a
water heater. Regarding how much can you sue them for, in the worse
case scenario, it's a lot more than $300. Let's say they botched the
install and left a gas pipe leaking, which a week later blew up the
house and killed the bread-winner. The chance of that are extremely
small, but there are certainly many other ways in which they could
cause damage way beyond a few hundred dollars.
What's the small claims court limit in NJ? Compare that to th cost of the
work. What does your insurance agent think about you agreeing to
arbitration? If it's a huge flood fiasco your insurance company may want to
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