Sisters of Visitation v. COCHRAN PLASTERING CO. INC.
775 So. 2d 759 | Supreme Court of Alabama | 2000
What This Case Means for Subcontractors
A monastery hired Cochran Plastering to repair chapel plaster work. When a dispute arose over damaged paintings, the Sisters tried to force arbitration using an arbitration clause in their contract. Cochran went to court to stop the arbitration. Alabama's Supreme Court ruled that the Federal Arbitration Act doesn't apply to this local work because it didn't substantially affect interstate commerce, so the arbitration clause was void and the case had to go to regular court instead.
Key Takeaways
- •Arbitration clauses may not be enforceable for purely local construction work that doesn't cross state lines or affect interstate commerce, even if the contract says disputes must be arbitrated.
- •Just because your contract has an arbitration clause doesn't guarantee you'll avoid court—a judge can void it if the work is local enough.
- •If you're a subcontractor doing work in one state for a local owner, understand that arbitration clauses may not protect you from litigation in that state's courts.
Transaction must substantially affect interstate commerce to be subject to FAA.
Frequently Asked Question
If my subcontract has an arbitration clause, am I guaranteed to arbitrate disputes instead of going to court?
Not necessarily. If your work is purely local and doesn't substantially affect interstate commerce, a court may void the arbitration clause and force the dispute into regular litigation instead. The Federal Arbitration Act only applies when interstate commerce is involved, so local-only projects may not be protected by arbitration agreements.
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