In October 2019, the Appellate Division of the Superior Court of New Jersey issued an opinion in the case of Becker v. Ollie Solcum & Son, Inc., examining the enforceability of an arbitration clause in a construction project. The decision continued the trend in New Jersey of limiting enforcement of arbitration agreements, particularly where one party is a customer.
The case arose from a dispute over a residential construction project. Robert and Catherine Becker entered into a contract with Ollie Slocum & Son, Inc. (“Slocum”) to build a new home for them for $1,850,000. Under the contract, the project was to be completed in no more than 52 weeks after excavation work started. Substantial completion was actually about one and a half years late. The Beckers sued Slocum in the Law Division of the Superior Court of New Jersey over the delay and alleged construction defects including water penetration and deterioration of the outdoor decking, siding, and finishing.
The contract, which contained a clause requiring arbitration of disputes, stated: