Answered Essay: Mr. Smith (buyer) and Mr. Jones (seller) entered into a written real estate contract to purchase

Mr. Smith (buyer) and Mr. Jones (seller) entered into a written real estate contract to purchase Mr. Jones shopping mall which is located in Los Angeles, CA. Mr. Smith just notified Mr. Jones that he changed his mind, doesn’t think it is a good deal, and refuses to go forward with the purchase. Mr. Jones has suffered loses from this breach of contract (fees he paid his attorneys to review the contract, loss of sale opportunity, etc.) Mr. Jones has contacted his attorneys and requested them to proceed with a civil lawsuit for damages against Mr. Smith. However, the following Arbitration Clause / Provision, with the written contract, was signed / initialed by both the parties (Buyer & Seller).

D. Assuming this was Not a Real Estate contract. Rather, let’s say there was a similar voluntary / mandatory Arbitration clause in the paper work you signed at your dentist’s office – and, now you are disputing the $10,000 bill your dentist is demanding you pay – would you still be required to go to Arbitration first or could you ignore the clause and file a lawsuit against your dentist in Civil Court? (10 points)

Expert Answer


If it is a mandatory arbitration clause, the parties are under mandate to settle the dispute outside the court only. If it is voluntary, then it is up to the customer to choose between the two options of going to the court or to go with arbitration. It will depend on the other clauses of contract that mention the details of service rendered and its cost to the customer.

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