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Is arbitration clause in Listing Agreement binding on one party but not the other?

Oakland, CA |

Listing agreement has a section for arbitration of disputes between seller and broker. It says "By initialing in the space below, you are agreeing to have any dispute arising out of the matters included in the "arbitration of disputes" provision decided by neutral arbitration..." This section was initialed by one party but not the other. Does this mean the one who DID initial must agree to arbitration if the one who did NOT insists on it? Or is this provision only applicable if both parties initialed it?

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Best Answer

I have been actively engaged as a real estate attorney for the past 29 years. Originally, I was a real estate attorney for Transamerican Title Insurance Company. Thereafter, I performed legal services for many of your major developers and have represented and sued many of your major local brokers. Our office represents individuals in Buy/Sell transactions on a regular and frequent basis.

In regard to the fee arbitration agreement, the standard form real estate purchase contract is unquestionable that both parties have to initial the arbitration paragraph for it to be binding. If a dispute arises the person who did not sign could reach an agreement with the other party and still could proceed to arbitration, but as the contract presently sits and strictly interpreted the contract says no one has a right to demand the other party participate in arbitration.

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No, both parties to the listing agreement must initial the arbitration provision in order for it to be binding.

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult your own attorney.


Both parties must initial for the arbitration to be mandatory.

The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also terms and conditions item 9, incorporated as if it was reprinted here.