AGREEMENT TO ARBITRATE

• NCJ Number: 64377
• Journal: Practical Lawyer Volume: 24 Issue: 2 Dated: (MARCH 1978) Pages: 61-72
• Author(s): G GOLDBERG
• Date Published: 1978
• Length: 12 pages
• Corporate Author: American Law Institute and American Bar Assoc
• Publication Format: Article
• Language: English
• Country: United States of America
• Note: ARTICLE BASED ON A CHAPTER IN A LAWYER'S GUIDE TO COMMERCIAL ARBITRATION, 1977

Annotation

LEGAL ASPECTS OF WRITTEN AGREEMENTS TO SUBMIT TO ARBITRATION ARE EXAMINED, INCLUDING ENFORCEMENT, FEDERAL LAW, EXCLUDED SITUATIONS, LOSS OF RIGHT, AND DRAFTING THE AGREEMENT.

Abstract

A WRITTEN AGREEMENT TO SUBMIT EXISTING DISPUTES TO ARBITRATION IS SPECIFICALLY ENFORCEABLE UNDER THE LAWS OF ALL STATES (EXCEPT OKLAHOMA AND VERMONT) AND UNDER THE UNITED STATES ARBITRATION ACT. TYPICALLY, THE PARTIES ENTER INTO A 'SUBMISSION AGREEMENT' THAT IDENTIFIES THE PARTIES, DESCRIBES THE DISPUTE TO BE SETTLED, INDICATES THE RELIEF SOUGHT BY EACH OF THE PARTIES, AND PROVIDES FOR ADMINISTRATION, AS UNDER THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION (AAA). SOME STATES ALSO REQUIRE THAT THE SUBMISSION AGREEMENT BE SIGNED AND FILED IN COURT AND SPECIFY THAT IT SHOULD CONTAIN THE NAMES OF THE ARBITRATORS OR BE ACKNOWLEDGED IN SOME SPECIAL WAY. THE SCOPE OF AN AGREEMENT TO ARBITRATE AN EXISTING DISPUTE MAY BE GREATER THAN THE SCOPE OF AN AGREEMENT TO ARBITRATE FUTURE DISPUTES. AS OF 1976, 35 STATES ENFORCED AT LEAST SOME AGREEMENTS TO ARBITRATE FUTURE DISPUTES. ARBITRATION IS WHOLLY DEPENDENT UPON THE WRITTEN AGREEMENT OF THE PARTIES TO RELINQUISH THEIR ACCESS TO THE COURTS AND TO SUBMIT A DISPUTE TO THE BINDING DETERMINATION OF ARBITRATORS. THE U.S. ARBITRATION ACT GOVERNS MOST COMMERCIAL ARBITRATIONS BECAUSE IT APPLIES TO ALL TRANSACTIONS IN INTERSTATE OR FOREIGN COMMERCE OR ADMIRALTY AND PREEMPTS LOCAL LAWS. HOWEVER, NOT EVERY CONTRACT CONTAINING AN ARBITRATION CLAUSE IS SUBJECT TO ARBITRATION. EXCLUDED AREAS INCLUDE USURY, ILLEGAL CONTRACTS, AND PATENT VALIDITY. A PARTY TAKING ANY ACTION INCONSISTENT WITH ARBITRATION CANNOT THEREAFTER INVOKE AN AGREEMENT TO ARBITRATE. UNDER THE RULES OF THE AAA, THE CLAIMANT CAN PROCEED WITH THE SELECTION OF ARBITRATORS AND SCHEDULING OF A HEARING EVEN IF THE RESPONDENT FAILS TO ANSWER A DEMAND FOR ARBITRATION. IF THE RESPONDENT FAILS TO APPEAR AT THE HEARING, THE ARBITRATORS WILL TAKE THE CLAIMANT'S PROOF EX PARTE AND RENDER AN AWARD. FOR AGREEMENTS TO ARBITRATE FUTURE DISPUTES, THE SPECIFIC CLAUSE RECOMMENDED BY AAA IS INCLUDED. CASE LAW IS CITED.