ENFORCEABILITY OF COMMERCIAL AGREEMENTS TO ARBITRATE FUTURE DISPUTES - JUDICIAL ALTERATION OF THE FLORIDA ARBITRATION CODE

• NCJ Number: 50869
• Journal: University of Florida Law Review Volume: 30 Issue: 3 Dated: (SPRING 1978) Pages: 615-639
• Author(s): R M ZABAK
• Date Published: 1978
• Length: 25 pages
• Corporate Author: University of Florida
• Publication Format: Article
• Language: English
• Country: United States of America

Annotation

THE HISTORICAL RELUCTANCE OF COURTS TO ENFORCE CONTRACTS WITH CLAUSES FOR ARBITRATION OF FUTURE DISPUTES, AND SEVERAL SPECIFIC DECISIONS OF FLORIDA COURTS WHICH HAVE NULLIFIED SUCH CLAUSES ARE REVIEWED.

Abstract

UNDER ENGLISH COMMON LAW ARBITRATION WAS NOT CONSIDERED BINDING BECAUSE THE COURTS DID NOT WISH TO SURRENDER JUDICIAL POWER. PRIOR TO 1920 THIS COMMON LAW NOTION THAT AGREEMENTS TO ARBITRATE FUTURE DISPUTES WERE UNENFORCEABLE PREVAILED. THAT YEAR THE NEW YORK LEGISLATURE ENACTED A LAW WHICH MADE BINDING ARBITRATION CLAUSES LEGAL, AND BY 1927 A TOTAL OF SIX STATES AND ALSO PASSED SUCH LAWS. IN 1957 FLORIDA ENACTED A LAW MAKING AGREEMENTS TO SETTLE FUTURE DISPUTES BY ARBITRATION LEGAL. HOWEVER, THE FLORIDA COURTS HAVE ISSUED A NUMBER OF RULINGS ALTERING THIS LAW. THE FLORIDA ARBITRATION CODE SPECIFIES TWO METHODS FOR TAKING AN ISSUE OUT OF THE CODE'S COVERAGE: (1) CONTRACTING PARTIES MAY STIPULATE THAT THE CODE WILL NOT BE APPLICABLE AND (2) AN APPLICATION FOR AN ORDER TO COMPEL ARBITRATION WILL BE DENIED IF THE COURT FINDS NO AGREEMENT TO ARBITRATE WAS MADE. FLORIDA COURTS, HOWEVER, HAVE BASED REFUSALS TO UPHOLD FUTURE-DISPUTE ARBITRATION AGREEMENTS ON A NUMBER OF FACTORS, INCLUDING: ALLEGATIONS OF FRAUD COMBINED WITH COMPLICATING FACTORS, AVOIDANCE OF A CONTRACT BY RESCISSION, INCONSISTENT CONDUCT RESULTING IN WAIVER, LACK OF CONTROVERTED ISSUES, AVOIDANCE OF PIECEMEAL LITIGATION, AND THE EXISTENCE OF A LAW THAT TAKES PRECEDENCE OVER THE ARBITRATION CODE. EACH OF THESE FACTORS IS EXAMINED IN DETAIL. THE APPLICABLE CASES ARE CITED. IT IS CONCLUDED THAT BY ALLOWING PARTIES TO ESCAPE APPARENTLY BINDING ARBITRATION AGREEMENTS, THE COURTS HAVE DISPLAYED A SKEPTICAL ATTITUDE TOWARD THE ARBITRATION PROCESS. IT IS SUGGESTED THIS WILL LEAD TO UNNECESSARY LITIGATION ON MATTERS WHICH COULD BEST BE HANDLED OUTSIDE THE COURTS. THE ARTICLE CONTAINS 204 FOOTNOTED REFERENCES.