Are You Secretly Signing a Mediation or Arbitration Clause in Your Contracts? Know the Difference

Real estate transactions can be complex. Unfortunately, many real estate deals that appeared to be watertight can go sour. A deal gone badly can cause great harm to either party.

Do Your Real Estate Contracts Include Mediation or Arbitration Clauses?

When signing a contract in California, most people are likely agreeing to a mediation clause, which may not necessarily be an arbitration clause. The reason is that standard real estate contracts in California (90 percent of all real estate contracts) include a mediation clause. There is no requirement for contracting parties to initial the clause because it takes effect immediately. However, each party must install a binding arbitration clause or it is not considered to be in effect.

Understand the Difference of Mediation and Arbitration

Understanding the difference between these two clauses is crucial. The result of mediation is that the outcome can be binding or non-binding depending on the agreement of both parties. The goal is to resolve the dispute so that it does not have to proceed any further. It is advisable for conflicting parties to go through this process even if there is no certainty of the relief it may provide.

Arbitration, on the other hand, is a binding process that results in a decision that cannot be appealed. While the process can be less expensive, people may not have the same options and legal protections that might be offered through a lawsuit. Palm Springs mediation attorneys have the knowledge and experience to educate individuals about the process.

Contact Experienced Real Estate and Land Law Attorneys in Palm Springs

Real estate and land law attorneys in Palm Springs are experienced professionals who can help clients avoid costly mistakes or omissions during the buying process. Contact us at 760-322-2275 to schedule a consultation for your contracts to be reviewed or created.

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