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Finding no valid agreement to arbitrate existing between the parties, a Texas Court of Appeals has taken the unusual step of reviewing an order granting a motion to compel arbitration in a construction dispute. Such review is rare because both Federal law and Texas statute clearly reflect a legislative intent to allow courts to only review denials of motions to compel arbitration.
In In re Premont Independent School District, No. 04-06-00810, 2007 WL 390784 (Tex. App. Feb. 7, 2007), Premont Independent School District (PISD) contracted with Braselton Construction Co. (BCC) to renovate several schools. Both parties signed a Standard Form contract, which incorporated by reference both General Conditions and Supplementary Conditions. The General Conditions included an arbitration agreement; the Supplemental Conditions appeared to delete that agreement.
BCC claimed that the deletion of the arbitration clause was not valid, because the Supplemental Conditions were not signed. The Court noted that many contracts incorporate unsigned documents, and such terms are enforceable. BCC then claimed that all modifications required signatures, but the Court found nothing in the language of the Standard Form contract to suggest this.
Ultimately, the Court held that "the unambiguous language of the Supplemental Conditions leaves no doubt that there is no arbitration agreement … to enforce." Given that, the Court determined that the trial court had abused its discretion in ordering arbitration, and so reversed the decision.
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