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Video Transcribed: Tulsa Construction Attorney Brian Carter with TulsaConstructionLawyer.com. This is the second video involving Garth Brooks’ case, and whether or not an owner can be bound by the terms of a subcontract, or vice versa, a subcontractor can enforce the terms of a subcontract against an owner.
I failed to mention in the first video that the issue in front of the court was whether or not there was an enforceable arbitration clause in the subcontract that the owner would be bound to. That would be Mr. Brooks bound to the arbitration clause that is only in the contract between the general contractor and the subcontractor.
The first video talked about how the court didn’t find any apparent authority on behalf of the general contractor to bind the owner to the terms of the subcontract. The other argument that the subcontractor presented was that Mr. Brooks ratified the terms of the subcontract.
In this sense, ratification means acceptance of or officially recognizing the act of the agent, in this case which would be the general contractor, and consenting to be bound to the terms of that subcontract. This is typically where an agent would have entered into a contract that the agent didn’t initially have authority to enter in, and then the owner or principle agrees to the terms.
In this case, the court did not find that there was a ratification, and they based that on a couple of things. They looked at the elements of ratification too that were before the court, where whether or not the owner was aware of the material facts of the contract, or on the opposite hand, willfully ignorant as to the contract.
Either way, the court decided that the owner, Mr. Brooks, was not willfully ignorant, nor was knowledgeable of the all the material facts contained in the contract, thus the arbitration provision was not enforceable against him.
The court kind of went back to the argument to apparent authority, where the principle accepts the risks and benefits of the subcontract with the third party even though the general contractor was the one who entered into the contract with the subcontractor.
With regard to willful ignorance, the standard was that Brooks would have had to demonstrated willful ignorance beyond that of an ordinary usual homeowner. The facts here just did not support that.
Arguably, others may see this differently as it was noted that Mr. Brooks was very involved in the process, but the court didn’t agree with the subcontractor and therefore found that the arbitration provision was not enforceable. Thank you for watching. Brian Carter, TulsaConstructionLawyer.com.
