Originally from:

Journal of American Arbitration (JAA) - Vol. 6, No. 1

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ARTICLES

Unconscionable, But Not Unenforceable:
Missouri Supreme Court Strikes Portions
of Arbitral Clause But Preserves
Agreement to Arbitrate in State ex. rel.
Vincent v. Schneider
By Mark Bracken

I. OVERVIEW OF THE CASE
Homebuilder McBride & Son Homes, Inc. (McBride)
executed written contracts that gave McBride the exclusive right to
require binding arbitration of all claims arising either out of the
contracts for the sale of single-family homes or defects in construction.1 The arbitration agreements required the president of
the Homebuilders Association of Greater St. Louis, who was also
the president of McBride at the time this dispute arose, to select the
arbitrator. This arbitration provision also contained a cost-shifting
element that made home buyers responsible for all of McBride’s
costs and fees incurred in arbitration.2 Each of the buyers initialed
this arbitration clause, acknowledging that they had read,
understood, and agreed to the terms.3 The clause stated:
It is agreed between the parties that Seller’s liability to
Purchaser for damages of any breach of this contract
(including, without limitation, defects in construction items
warranted hereunder or breach of Seller’s warranties) shall be
limited to the reasonable cost of repair or replacement of any
defective items of labor or material. In the event of any claim
by Purchaser against seller arising out of this Contract or the