In a win for small businesses, the Alabama Supreme Court recently upheld an arbitration provision in an agreement between two homebuyers and a home inspector. Typical to the homebuying process, one of the buyers electronically signed an inspection agreement, hiring the inspector to inspect a home before closing. The inspection agreement included an arbitration provision. After the inspection and the home closed, the buyer sued the inspector under various claims related to issues with the home’s floors that were not in the inspection report. When the inspector moved to compel arbitration, the buyers argued that the arbitration provision was invalid. The Supreme Court overturned the lower court and enforced the arbitration provision of the agreement.

The continued enforcement of arbitration provisions is a boon for business. Arbitration is often a cost-saving dispute resolution process for small businesses but has not always been allowed in Alabama. Alabama REALTORS® applauds the Alabama Supreme Court for upholding this important alternative to litigation.

To read the Supreme Court opinion in full, click here.