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Feig v. Spirit of the Spung, Inc.

A-3082-07T3 (N.J. Super. App. Div. 2009) (Unpublished)

CONSUMER FRAUD ACT; ARBITRATION — Where a contract’s arbitration provision does not clear and unmistakably waive any statutory right or remedy, such as the rights and remedies provided by the Consumer Fraud Act, a party is not required to have its Consumer Fraud Act claims heard by the arbitrator.

The contract for construction of a home contained an arbitration provision reading as follows: “[a]ny controversy, dispute or claim arising out of or relating to this Contract, as now or hereafter amended, or any breach or interpretation thereof shall be settled by arbitration in accordance with the commercial arbitration rule ... .” A home buyer seeking return of its deposit based upon an alleged failure of the mortgage contingency filed suit, alleging not only breach of the contract, but also violation of the Consumer Fraud Act (CFA) by the builder. The builder argued that the dispute had to be resolved by arbitration, not by a court proceeding. The Appellate Division pointed out that the contract’s arbitration provision did “not clearly and unmistakably waive any statutory right or remedy, such as the rights and remedies provided by the CFA.” Accordingly, referral of the dispute to arbitration was not proper given the claims asserted by the home buyer against the contractor.


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