Enforceability Of Arbitration Clauses In New Jersey Consumer Contracts

Overview

The New Jersey Appellate Division's recent decision in Wang v. COA 99 Hudson, LLC (2025 N.J. Super. LEXIS 123) underscores the critical need for real estate developers and contractors to draft clear and enforceable arbitration clauses in consumer contracts. This ruling reinforces New Jersey's stringent requirements for arbitration agreements, particularly in consumer-based transactions, and serves as a reminder to review and update contract language to mitigate litigation risks.

Case Background

In Wang v. COA 99 Hudson, LLC, plaintiffs Jia Wang and Xiaodong Jiang entered into a Subscription and Purchase Agreement (SPA) to buy a condominium unit in Jersey City from defendants COA 99 Hudson, LLC, and others. The SPA contained an arbitration clause stating that disputes would be resolved through "binding arbitration." When the plaintiffs refused to close, citing issues like unit size and construction defects, the defendants sought to enforce the