The arbitrator is not chosen by the contractor alone
If a dispute goes to arbitration and the contractor picked the arbitrator, you have lost before it starts. This was the most serious recurring clause in the agreements reviewed.
What to look at
- Who names the arbitrator, in the clause itself
- Whether both parties agree the appointment, or one side decides
- The seat and the language of the arbitration
How to check it yourself
Find the arbitration clause and read who appoints. A person whose relationship with one party falls within the Seventh Schedule of the Arbitration and Conciliation Act is ineligible to act, and an appointment made solely by an interested party has been struck down by the courts. Ask for either a jointly appointed arbitrator or appointment by an institution. If the clause stays one-sided, take it to a lawyer before signing.
Where this comes from: Arbitration and Conciliation Act 1996, s.12(5) with the Seventh Schedule (required by law)
More construction agreement checks before you sign
- Agreement check passed
- Contractor background verified
- Site handover checklist agreed
- Worker-welfare rules applicability checked
- GST treatment understood before signing
- The payment schedule keeps money back until the end
- The agreement does not contradict itself
- GST is stated, and you know who pays it
- You know who you are contracting with
- Price escalation has a limit you can calculate
- Foundation extras cannot be open-ended
- Curing is the contractor's job, in writing
- There is a warranty, and it has a length
- Worker safety stays with the contractor
- Signing for a stage does not sign away everything after it
- There is a way to settle a dispute short of court
- Cancellation terms are not written by one side
- Nobody else builds your house without you knowing
- No blank spaces, no missing dates
- Money goes to the company, not to a person
- You can ask where the money went
- Delay has a consequence for both sides
- The quotation is attached to the agreement
- Force majeure is not a blanket excuse
The whole stage: Construction agreement checks before you sign