Dispute Resolution & Arbitration Agreement

Version: 2.0
Effective Date: December 29, 2025
Last Updated: December 29, 2025

DISPUTE RESOLUTION & ARBITRATION AGREEMENT

This Dispute Resolution & Arbitration Agreement ("Agreement") is incorporated into the Terms of Service and all tier-specific contracts (Materials Only, BYOI Basic, BYOI Certified) for Carpet Installers Direct ("Platform," "we," "us," or "our").

By using the Platform or placing an order, you agree to resolve disputes via arbitration instead of court litigation.

1. Purpose and Scope

1.1 Why This Agreement Exists

Litigation is expensive, time-consuming, and unpredictable. This Agreement provides a faster, cheaper, and more efficient way to resolve disputes between you and Platform.

Benefits of arbitration:

• ✅ Faster resolution: Arbitration typically takes 3-6 months (vs. 1-2 years for court)
• ✅ Lower cost: Arbitration fees are lower than court filing fees + attorney fees
• ✅ Expert arbitrators: Arbitrators have expertise in commercial disputes (vs. jury with no expertise)
• ✅ Privacy: Arbitration is confidential (vs. public court records)

1.2 What Disputes Are Covered

This Agreement applies to all disputes between you and Platform, including:

• Contract disputes (pricing errors, refund denials, service failures)
• Product disputes (defective materials, shipping damage, wrong product)
• Installation disputes (installer misconduct, quality issues, scheduling issues)
• Payment disputes (billing errors, unauthorized charges, chargebacks)
• Privacy disputes (data breaches, unauthorized use of personal information)
• Tort claims (negligence, fraud, misrepresentation)
• Statutory claims (consumer protection violations, deceptive trade practices)

1.3 What Disputes Are NOT Covered

This Agreement does NOT apply to:

• Small claims court: Either party may file in small claims court (if dispute amount is below small claims limit - typically $5,000-$15,000 depending on state)
• Intellectual property disputes: Trademark infringement, copyright violations, patent disputes (resolved in federal court)
• Injunctive relief: Emergency requests to stop harm (e.g., restraining order to stop defamation)
• Installer-customer disputes (BYOI tiers): BYOI customers deal with installers directly (Platform is NOT a party to those disputes); for BYOI Certified tier, NCR process is available for documentation

2. Step 1: Informal Resolution (Required Before Arbitration)

2.1 Contact Platform First

You MUST contact Platform before filing arbitration. Informal resolution resolves most disputes quickly and avoids arbitration costs.

How to initiate informal resolution:

1. Email: disputes@carpetinstallersdirect.com
2. Include:
   • Your name, email, phone, order number
   • Description of dispute (what happened, what you want)
   • Supporting documents (photos, emails, receipts)
3. Subject line: "Dispute Resolution Request: [Order Number]"

2.2 Platform's Response Timeline

Platform will:

• Acknowledge receipt within 48 hours
• Investigate within 10 business days
• Provide resolution proposal (refund, replacement, repair, goodwill credit, etc.)

2.3 Good Faith Negotiation

Both parties agree to negotiate in good faith for 30 days after Platform's initial response. This means:

• ✅ Communicate promptly and professionally
• ✅ Consider reasonable settlement offers
• ✅ Provide requested information
• ❌ Do NOT make unreasonable demands
• ❌ Do NOT refuse to negotiate

2.4 If Informal Resolution Fails

If dispute is NOT resolved within 60 days of your initial contact, either party may proceed to arbitration.

Exception: You may skip informal resolution if:

• Platform is unresponsive (no reply within 10 business days)
• Platform refuses to negotiate
• Dispute requires immediate arbitration (e.g., time-sensitive claim)

3. Step 2: Binding Arbitration

3.1 Arbitration Rules

If informal resolution fails, disputes are resolved via binding arbitration under the American Arbitration Association (AAA) Consumer Arbitration Rules.

AAA Consumer Arbitration Rules:

• Rules designed for consumer disputes (simpler, faster, lower cost than commercial arbitration)
• Available at adr.org/consumer

If AAA is unavailable or unwilling to arbitrate, parties will select a mutually agreeable arbitration provider (e.g., JAMS, National Arbitration and Mediation).

3.2 One Arbitrator (Not a Panel)

Disputes are decided by one arbitrator (not a panel of three).

How arbitrator is selected:

1. Parties agree: If you and Platform agree on an arbitrator, that person is appointed
2. AAA appoints: If no agreement, AAA provides a list of 5 arbitrators; each party strikes 2; remaining arbitrator is appointed

Arbitrator qualifications:

• Licensed attorney (in good standing)
• Minimum 5 years of experience in commercial disputes
• No conflicts of interest (not affiliated with Platform or you)

3.3 Arbitration Location and Format

In-Person Arbitration:

• Held in [County], Georgia (Platform's home county)
• Exception: If you live more than 100 miles from [County], Georgia, arbitration may be held in your county (at your request)

Remote Arbitration (Phone/Video):

• Either party may request remote arbitration (no travel required)
• Arbitrator conducts hearing via Zoom, phone, or similar platform

Documents-Only Arbitration:

• If both parties agree, arbitration may be conducted via written submissions only (no hearing)

3.4 Arbitration Fees

AAA Filing Fee:

• Customer pays: $200 (for claims under $10,000)
• Platform pays: $200 (for claims under $10,000) + additional AAA administrative fees ($500-$1,000)

Arbitrator's Fee:

• Typically $250-$500 per hour (varies by arbitrator)
• Platform pays 100% of arbitrator's fee if your claim is under $10,000

Attorney's Fees:

• Each party pays its own attorney's fees (unless arbitrator awards attorney's fees - see Section 3.8)

If you cannot afford $200 filing fee:

• Request fee waiver from AAA (AAA provides fee waivers for low-income individuals)
• Platform will NOT oppose your fee waiver request

3.5 Arbitration Process

Step 1: File Demand for Arbitration

• Submit to AAA (online or by mail)
• Include: Description of dispute, amount in controversy, relief requested
• Pay filing fee ($200)

Step 2: AAA Serves Platform

• AAA notifies Platform of arbitration demand
• Platform has 30 days to respond

Step 3: Arbitrator Selection

• Parties select arbitrator (see Section 3.2)

Step 4: Discovery (Limited)

• Exchange documents (contracts, emails, photos, receipts)
• Depositions are rare (to keep costs low)

Step 5: Hearing

• In-person, remote, or documents-only
• Each party presents evidence and arguments
• Witnesses may testify (under oath)
• Cross-examination allowed

Step 6: Arbitrator's Decision

• Arbitrator issues written decision within 30 days of hearing
• Decision is final and binding (see Section 4)

Timeline: Arbitration typically takes 3-6 months from filing to decision.

3.6 Evidence and Discovery

Documents:

• Each party must provide relevant documents (contracts, emails, photos, invoices)
• Arbitrator may order production of documents

Depositions:

• Limited (to keep costs low)
• Arbitrator may allow depositions if necessary (e.g., expert witnesses)

Subpoenas:

• Arbitrator may issue subpoenas to compel testimony or documents

Rules of Evidence:

• Relaxed (arbitrator uses discretion)
• Hearsay is generally allowed (unlike court)

3.7 Arbitrator's Authority

The arbitrator may:

• Award monetary damages (up to the amount in controversy)
• Award refunds or credits
• Order Platform to perform specific actions (deliver materials, fix installation, etc.)
• Award attorney's fees (if warranted - see Section 3.8)
• Award punitive damages (if fraud or willful misconduct is proven)

The arbitrator may NOT:

• Award damages exceeding Platform's liability limits (see tier-specific contracts)
• Certify a class action (see Section 5)
• Order relief that benefits non-parties (except in rare cases)

3.8 Attorney's Fees

Default rule: Each party pays its own attorney's fees (no fee-shifting).

Exceptions (arbitrator may award attorney's fees to prevailing party if):

• State law provides for attorney's fees (e.g., Georgia consumer protection statutes)
• Contract provides for attorney's fees (this Agreement does NOT, but tier-specific contracts may)
• Losing party's claim was frivolous or in bad faith

Platform's commitment:

• Platform will NOT seek attorney's fees from you unless your claim was frivolous (filed in bad faith to harass Platform)

4. Arbitrator's Decision is Final and Binding

4.1 No Appeals (With Limited Exceptions)

The arbitrator's decision is FINAL. Neither party may appeal to a court, except in rare circumstances:

• Arbitrator exceeded their authority (awarded relief beyond what was requested)
• Arbitrator was biased or corrupt (conflict of interest, accepted bribe)
• Award was procured by fraud (party submitted falsified evidence)
• Award violates public policy (e.g., arbitrator ordered illegal conduct)

Appeals are handled under the Federal Arbitration Act (FAA) or Georgia Arbitration Code.

4.2 Enforcement of Arbitration Award

If either party fails to comply with arbitrator's award:

• Winning party may file in court to enforce award (convert arbitration award to court judgment)
• Court MUST confirm award (unless rare exceptions in Section 4.1 apply)
• Judgment is enforceable via garnishment, liens, asset seizure (same as court judgment)

5. Class Action Waiver

5.1 No Class Actions or Class Arbitrations

You agree to resolve disputes individually, NOT as part of a class action, class arbitration, or representative action.

This means:

• ❌ You may NOT join a class action lawsuit against Platform
• ❌ You may NOT act as a class representative or participate in class-wide arbitration
• ❌ You may NOT consolidate your claim with other customers' claims

Each dispute is arbitrated individually.

5.2 Why Class Actions Are Prohibited

Class actions are:

• Expensive for defendants (often settle for millions regardless of merit)
• Slow (take 5-10 years to resolve)
• Unpredictable (jury verdicts can be extreme)
• Inefficient for plaintiffs (class members receive pennies while attorneys receive millions)

Individual arbitration is faster, cheaper, and fairer for both parties.

5.3 Exceptions to Class Waiver

You may still:

• ✅ File individual arbitration (covered by Platform under Section 3.4)
• ✅ File in small claims court (if dispute amount is below small claims limit)
• ✅ Opt out of class waiver (see Section 6)

5.4 Severability of Class Waiver

If the class waiver is found unenforceable (by a court or arbitrator):

• The entire arbitration agreement is void (disputes go to court instead of arbitration)
• But Terms of Service remain in effect (including liability limitations, governing law, etc.)

6. Opt-Out Right (30 Days)

6.1 You May Opt Out of Arbitration and Class Waiver

You have 30 days to opt out of this Arbitration Agreement (from the date you first accept Terms of Service).

How to opt out:

1. Email optout@carpetinstallersdirect.com
2. Subject line: "Arbitration Opt-Out"
3. Include: Your full name, email, and date you accepted Terms of Service

If you opt out:

• ✅ Disputes are resolved in Georgia court (not arbitration)
• ✅ You retain the right to participate in class actions
• ❌ You lose the benefits of arbitration (speed, lower cost, privacy)

Important: You must opt out within 30 days. After 30 days, you are bound by this Arbitration Agreement.

6.2 Opt-Out Does NOT Cancel Your Account

Opting out of arbitration does NOT:

• Cancel your account
• Affect your ability to place orders
• Void existing contracts (Materials Only, BYOI, Full Service)

You simply resolve future disputes in court instead of arbitration.

7. Governing Law and Jurisdiction (If Arbitration Doesn't Apply)

7.1 Georgia Law Applies

This Arbitration Agreement and any disputes are governed by:

• Federal Arbitration Act (FAA) (9 U.S.C. §§ 1-16)
• Georgia Arbitration Code (O.C.G.A. §§ 9-9-1 et seq.)
• Georgia substantive law (contract, tort, consumer protection)

7.2 If You Opt Out or Arbitration is Inapplicable

If you opt out (Section 6) or arbitration doesn't apply (Section 1.3), disputes are resolved in:

• Superior Court of [County], Georgia (for amounts above small claims limit)
• Small claims court (for amounts below limit - typically $15,000 in Georgia)

You consent to exclusive jurisdiction of Georgia courts.

8. Modification and Severability

8.1 Platform May Update This Agreement

Platform may update this Arbitration Agreement by:

• Posting updated version at [website URL]
• Incrementing version number
• Notifying customers via email

Changes apply to disputes arising after update (not retroactive to existing disputes).

Material changes requiring consent:

• Increasing your arbitration filing fee
• Changing arbitration provider (from AAA to another provider)
• Removing Platform's fee-paying obligation (Section 3.4)

If Platform makes material changes, you may opt out (within 30 days of notification).

8.2 Severability

If any provision of this Agreement is found invalid or unenforceable:

• Remaining provisions remain in effect
• Exception: If class waiver is invalid, entire arbitration agreement is void (see Section 5.4)

9. Special Rules by Service Tier

9.1 Materials Only Tier

Most common disputes:

• Wrong product shipped
• Shipping damage
• Refund denials
• Pricing errors

Resolution approach:

• Informal resolution typically resolves (Platform issues refund or replacement)
• Arbitration rare (disputes are straightforward)

9.2 BYOI Basic Tier

Most common disputes:

• Installer verification issues (Platform verified installer who turned out to have issues)
• Coordination failures (Platform failed to schedule delivery)
• $99 fee disputes (customer believes fee was not earned)

Important: Platform is NOT a party to installer-customer disputes (e.g., poor workmanship, property damage). Those disputes are between you and installer.

9.3 BYOI Certified Tier

Most common disputes:

• Same as BYOI Basic, plus:
• $149 fee disputes
• NCR (Non-Conformance Report) disputes
• Quality metrics disagreements

NCR Process (Not Arbitration):

• For quality issues, BYOI Certified customers can file an NCR
• NCR is for documentation and quality tracking
• NCR does NOT replace arbitration for disputes with Platform
• NCR does NOT make Platform liable for installer issues

Important: Platform is NOT a party to installer-customer disputes. NCR process is for tracking, not dispute resolution.

10. Statute of Limitations

10.1 1-Year Deadline to File Claims

Any claim against Platform must be filed within 1 year of the event giving rise to the claim.

Example:

• Defective carpet delivered January 1, 2026
• Customer must file arbitration by January 1, 2027
• After January 1, 2027, claim is time-barred (cannot be filed)

Exceptions:

• Fraud claims: 4 years (Georgia statute of limitations for fraud)
• Personal injury: 2 years (Georgia statute of limitations for personal injury)
• Breach of contract: 6 years (Georgia UCC statute of limitations)

If state law provides a longer statute of limitations, that period applies. This section does NOT shorten statutory limitations.

10.2 Tolling During Informal Resolution

The 1-year deadline is paused during informal resolution (Section 2).

Example:

• Defect discovered January 1, 2026
• Customer contacts Platform March 1, 2026 (informal resolution begins)
• Informal resolution fails June 1, 2026 (90 days later)
• Customer must file arbitration by December 1, 2026 (original 1-year deadline minus 90 days = 9 months remaining)

11. Confidentiality

11.1 Arbitration is Confidential

Arbitration proceedings are confidential. This means:

• ✅ Arbitration hearings are NOT public (unlike court trials)
• ✅ Arbitration documents are NOT public records
• ✅ Arbitration award is confidential (unless court enforcement is required)

11.2 Permitted Disclosures

Either party may disclose arbitration information:

• To attorneys, experts, witnesses (for arbitration preparation)
• To courts (for enforcement of award)
• To law enforcement (if illegal conduct is discovered)
• As required by law (subpoenas, government requests)

12. Mass Arbitration Protocol

12.1 Handling Large Numbers of Claims

If 25+ customers file arbitration against Platform for similar claims (e.g., data breach, defective product):

Bellwether process:

1. Select 10 representative cases (5 chosen by customers, 5 chosen by Platform)
2. Arbitrate those 10 cases first
3. Use results to inform settlement negotiations for remaining cases

Why bellwether process:

• Avoids paying arbitration fees for hundreds/thousands of cases simultaneously
• Provides data on likely outcomes (guides settlement)

12.2 Mass Arbitration Fees

If mass arbitration occurs:

• Platform pays AAA fees for bellwether cases (up to 10 cases)
• Remaining cases are held pending settlement negotiations
• If settlement fails, remaining cases proceed (Platform pays arbitration fees per Section 3.4)

13. Contact Information

For dispute resolution questions:

Carpet Installers Direct - Disputes Department
Email: disputes@carpetinstallersdirect.com
Phone: [Phone Number]
Address: [Physical Address, Georgia]
Business Hours: Monday-Friday, 9 AM - 5 PM EST

To opt out of arbitration:
Email: optout@carpetinstallersdirect.com

To file arbitration:
American Arbitration Association (AAA)
Website: adr.org/consumer
Phone: 1-800-778-7879

14. Summary of Key Points

Informal resolution first: Contact disputes@carpetinstallersdirect.com (required before arbitration)

Arbitration rules: AAA Consumer Arbitration Rules (simpler, faster, lower cost than court)

Arbitration fees:

• You pay: $200 filing fee (waived if you cannot afford)
• Platform pays: Arbitrator's fee (for claims under $10,000)

No class actions: Disputes resolved individually (not as part of class action)

Opt-out: You have 30 days to opt out (email optout@carpetinstallersdirect.com)

Decision is final: Arbitrator's decision is binding (no appeals except rare circumstances)

Effective Date: December 29, 2025
Version: 2.0
Document ID: ARB-AGR-2025-v2.0

Attorney Review Notes

⚠️ IMPORTANT: This document should be reviewed by a Georgia-licensed attorney before use. Key areas requiring review:

1. AAA Consumer Arbitration Rules compliance - Verify arbitration process aligns with AAA rules (filing, fees, discovery, hearing procedures)
2. Class waiver enforceability - Ensure class waiver meets Supreme Court standards (AT&T Mobility v. Concepcion, Epic Systems v. Lewis); verify no state law invalidates waiver
3. Opt-out mechanism - Confirm 30-day opt-out is clearly disclosed and enforceable
4. Fee-shifting provisions - Verify Platform's fee-paying obligation (Section 3.4) is sufficient to avoid "prohibitive cost" challenges
5. Severability of class waiver - Confirm "poison pill" (if class waiver is invalid, arbitration agreement is void) is enforceable
6. Georgia Arbitration Code alignment - Ensure agreement complies with O.C.G.A. §§ 9-9-1 et seq.
7. Federal Arbitration Act (FAA) preemption - Verify FAA preempts any conflicting state laws
8. Mass arbitration protocol - Confirm bellwether process is enforceable and consistent with AAA mass arbitration procedures
9. NCR process clarification - Ensure NCR process is clearly distinguished from formal dispute resolution

Recommended attorney budget: $350-500 for Arbitration Agreement review (high stakes - must withstand legal challenges)

CRITICAL: Arbitration agreements are frequently challenged in court. This document must be crystal clear, fair, and enforceable to survive judicial scrutiny.