Negligence and Duty of Care

Case Analysis

Robin McClish

Kaplan University

Case Analysis

Case: Thomas Baker and others who bought new homes from Osborne Development Corp. sued for multiple defects in the houses they purchased. When Osborne sold the homes, it paid for them to be in a new home warranty program administered by Home Buyers Warranty (HBW). When the Company enrolled a home with HBW, Osborne paid a fee and filled out a form that stated the following: “By signing below, you acknowledge that you CONSENT TO THE TERMS OF THESE DOCUMENTS INCLUDING THE BINDING ARBITRATION PROVISION contained therein.” HBW then issued warranty booklets to the new homeowners that stated: “Any and all claims, disputes, and controversies by or between the Homeowner, the Builder, the Warrant Insurer and/or HBW shall be submitted to arbitration.”

Arbitration is defined as “the submission of a dispute to an unbiased third person designated by the parties to the controversy, who agree in advance to comply with the award – a decision to be issued after a hearing at which both parties have an opportunity to be heard” (The Free Dictionary). In this case, it is stated that “the plaintiffs received an “Osborne Development Corporation Homeowner’s Policy” which contained a limited one-year warranty, but which did not contain an arbitration agreement. A few weeks after moving into their homes, plaintiffs received a copy of a “2-10 Home Buyers Warranty” which contained the arbitration provisions and which purported to disclaim any and all other warranties provided by the builder (Court of Appeal, 2008).

Even though the Buyer’s Warranty contained arbitration provisions, the homeowners did not sign anything regarding arbitration and the policy sent to them did not contain an arbitration agreement; therefore they are not bound and they can sue the builder in court.

References

Court of Appeal. (2008, January 31). Thomas baker et al., plaintiffs and respondents, v. Osborne development corporation, defendant and...