Under the standard California Residential Purchase Agreement, all of the following are accurate statements about the arbitration clause EXCEPT:

Correct Answer

D) Arbitration is mandatory and both parties are automatically bound upon signing the RPA

In the California RPA, the arbitration clause is NOT automatically binding upon signing the purchase agreement. The parties must separately initial the arbitration provision to opt in. This is a critical distinction — unlike mediation, arbitration is optional and requires affirmative consent through separate initialing.