Tim Huey Corp. v. Global Boiler & Mechanical, Inc.
649 N.E.2d 1358 | Appellate Court of Illinois | 1995
What This Case Means for Subcontractors
Tim Huey Corp. hired Global Boiler & Mechanical to build a cogeneration facility for $687,175, but Global stopped work in May 1990 after being paid $412,516, claiming Huey breached the contract. The dispute went to arbitration. The Illinois Appellate Court ruled that arbitration awards are nearly impossible to overturn—courts won't vacate them for errors in judgment, mistakes of law or fact, or disputes over damages unless there's fraud, bad faith, or a clear violation of the contract's core terms. This means subcontractors who agree to arbitration should understand they have very limited appeal options if they lose.
Key Takeaways
- •Arbitration clauses are extremely difficult to challenge in court—don't rely on appealing an arbitration loss unless you can prove fraud or bad faith
- •Written change orders are essential; the contract required them for extra work, so verbal agreements won't protect you if disputes arise
- •Before signing a contract with an arbitration clause, understand the arbitrator's authority and the law that governs the agreement (this contract used Texas law despite being in Illinois)
- •If you stop work, document your reasons thoroughly—the other party will likely claim breach, and arbitration awards are hard to overturn
Courts do not vacate arbitration awards for mere error in judgment or mistakes of law or fact.
Frequently Asked Question
Can I appeal an arbitration decision if the arbitrator made a mistake?
No, not easily. Courts almost never overturn arbitration awards for errors in judgment, mistakes of law or fact, or disagreements over damages. You can only challenge an award if you can prove fraud, bad faith, or that the arbitrator violated the contract's core terms. This is why it's critical to negotiate arbitration clauses carefully before signing.
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