Grandvue Manor, LLC v. Cornerstone Contracting Corp.

A wealthy couple created Grandview Manor LLC in New Jersey to build their $10 million dream home in New York. Grandview contracted with Cornerstone Contracting to construct the house. The parties selected the law of New York to govern the contract, which called for binding arbitration to resolve any disputes. A dispute arose, and Grandview sued in New Jersey. The New Jersey Appellate Division ruled that the parties clearly and unambiguously agreed to submit any claim not resolved by mediation to binding arbitration. The Court noted that, concerning the enforceability of arbitration agreements, the law of New Jersey diverges slightly from that of New York. Unlike New York courts, which perform an initial screening to determine whether the parties generally agreed to arbitrate claims, New Jersey courts inquire into the substance of the arbitration provision to determine whether the parties expressly waived their right to seek relief in court. But that distinction did not matter in this matter, and the Appellate Division affirmed the lower court’s order compelling arbitration.

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