ARBITRATION CLAUSE HELD TO BE AN UNFAIR CONTRACT TERM

Mylcrist Builders Ltd v Buck [2008] EWHC 2172 (TCC); [2008] BLR 611

In Mylcrist Builders Ltd v Buck [2008] EWHC 2172 (TCC); [2008] BLR 611 Mr Justice Ramsey held that an arbitration clause in a contract between a builder and a houseowner was an unfair contract term and was not binding on the houseowner. The case demonstrates the impact which the Unfair Terms in Consumer Contracts Regulations 1999 (SI No 1999/2083) may have on the enforceability of contract terms in contracts between professionals in the construction industry and their consumer clients. The impact of this decision could be far-reaching. It suggests that an arbitration clause is unlikely to be effective in a contract with a consumer unless the professional explains to the consumer the likely cost of the arbitration and the limited right of appeal which the consumer is likely to have to the court.