In law school we learned that adhesionary provisions in a contract are unenforceable. But I’ve never seen anyone use that as a successful defense.
Until now.
Floor and Décor contracted with MAPP LLC to build an F&D retail store. F&D sent a notice to MAPP terminating the construction contract due to project delays. The CEO of MAPP pushed back and requested a $3+ million payment for work performed through the termination date.
When F&D did not respond, MAPP asserted litigation. F&D moved to compel arbitration. The arbitration clause in the construction contract provided that only one party – F&D – could require arbitration.
When the district court denied F&D’s motion to compel arbitration, F&D appealed.
One defense against the validity of a contract is adhesion. Contracts that contain adhesionary clauses render the contract invalid.
MAPP contends the arbitration provision lacks mutuality, since only one party can effectively decide to arbitrate or not, and as a result the clause is adhesionary. This assertion required the appellate court to review the factors constituting adhesion.
The factors that yield a contract of adhesion typically focus on mutuality of the contract provisions, and relative bargaining positions of the parties. As well, context and circumstances matter.
Some courts will consider “take it or leave it” business to consumer transactions to be suspect, versus “business to business” contracts where the parties may have more flexibility to negotiate provisions. But this test is hardly dispositive.
Boilerplate, small-type “hidden” text is automatically concerning; placing the offensive provision in its own section, with its own label and bold, uppercase font may yield a result in favor of enforcement.
This particular provision, not hidden in any manner, gives F&D the right to compel arbitration, while denying MAPP the same right. Next up: was the contract imbalanced or tilted unreasonably to the benefit of one side and detriment to the other?
The Court learned that F&D is a major, national retail chain with almost 300 stores in 40 States, while MAPP is a local construction management company. F&D furnished a construction form that MAPP had no input in drafting. MAPP had little choice but to accept the unequal contract terms, to obtain the work.
From there, the Court determined that “an unequal bargaining position is evident when the contract unduly burdens one party in comparison to the burdens imposed upon the drafting party and the advantages allowed to that party.” Finding that MAPP was in an inferior bargaining position as compared to F&D, the Court determined that the provision supports a finding of adhesion.
The one-way arbitration provision is adhesionary and unenforceable. MAPP wins; F&D loses and will not be able to arbitrate this dispute.
See MAPP LLC v. Floor and Décor Outlets of America; Cause 25-30536; US 5th Circuit Court of Appeals; August 6, 2026: https://cases.justia.com/federal/appellate-courts/ca5/25-30536/25-30536-2026-08-06.pdf?ts=1786037454.
Stuart A. Lautin, Esq.*
* Board Certified, Commercial and Residential Real Estate Law, Texas Board of Legal Specialization
Licensed in the States of Texas and New York