Texas Family Beats Arbitration Bid Over Tight Budget on Appeal

Residential home builder Continental Homes of Texas L.P. won’t be able to arbitrate claims over defects in the foundation of a couple’s home, after a Texas appeals court ruled that the family can’t afford arbitration on a “shoestring budget.”

Continental Homes agreed to build a house for Giancarlo and Krystle Perez in San Antonio, Texas. The contract had an arbitration clause, stating that plaintiffs would pay part of the fees, instead of shifting all fees to the home builder.

The Perezes argued that the agreement was unfair because they couldn’t afford arbitration fees, which could cost nearly $10,000, according to ...