Deleting a paragraph from a form subcontract can affect much more than just the deleted language. In a recent Minnesota case, the parties struck one paragraph that contemplated arbitration procedure, but they left another arbitration paragraph, assuming it would hold. Unfortunately, it’s not that simple.
The District Court Found No Arbitration Agreement
In October 2024, the drywall subcontractor in Commercial Drywall, Inc. v. Povolny Group, Inc. sued the general contractor and its surety over two allegedly unpaid invoices totaling $20,625. The general contractor moved to compel arbitration under Article 8 of the subcontract in July 2025. The subcontractor opposed the motion.
The subcontract contained multiple provisions which detailed when and how disputes would be arbitrated. For example, it explained that arbitration would be filed with the American Arbitration Association (AAA) and that the Construction Industry Arbitration Rules would apply.
However, a key provision in this section was deleted: the provision dictating the necessary procedure to kick off the arbitration claim. The deleted section, section B(iii), required the subcontractor to request arbitration via written demand within 20 days of the contractor’s decision on the relevant claim. Notably, the entire process for arbitrating, discussed at B(i), relied on a timely request for arbitration under B(iii).
Therein lies the rub.
The court reasoned that, if there was no provision explaining how to timely request arbitration under B(i), then it wasn’t possible to satisfy that provision, enabling arbitration under B(iii). Put more simply: because the parties removed the process for formally requesting arbitration, they had also forfeited the right to arbitrate. The decision held up on appeal.
The Court, Not an Arbitrator, Decided Arbitrability
The subcontractor also argued that an arbitrator should decide whether the dispute was subject to arbitration.
Courts generally decide this threshold question unless the parties clearly and unmistakably delegate it to an arbitrator. The subcontract contained no express delegation provision, and the court held that the references to the AAA and Construction Industry Arbitration Rules clearly and unmistakably evinced the parties’ desire to arbitrate.
Key Takeaway: Treat Dispute Resolution as a Connected Process
Parties often edit form agreements to shorten notice periods, remove initial decisionmakers, or replace arbitration with litigation. Each change should prompt a cross-reference review of the agreement, general conditions, exhibits, and incorporated prime contract. A severability clause can’t reliably supply a missing procedure or rewrite a condition that the parties can no longer satisfy.
The review should also test the revised process against a realistic claim timeline. For example:
- Who receives the initial claim?
- What starts the response period?
- Is a written demand required?
- What happens if a deadline is missed?
- Does mediation come before binding dispute resolution?
If the parties want an arbitrator to decide arbitrability, the contract should say so expressly and define the scope of that authority. The agreement should also use compatible language for the selected binding method, administering rules, location, preconditions, and deadlines.
See How A101, A201, and A401 Work Together
A subcontract doesn’t operate alone. Learn how coordinated contract documents can align expectations between the owner, general contractor, and subcontractors.
