Arbitration Agreement with Case Laws

Arbitration agreements have become common practice in business contracts, often included to resolve disputes outside of a court of law. These agreements outline the terms and conditions that parties must follow in order to have their claims heard and decided by an arbitrator rather than by a judge or jury. However, there have been several cases where the validity and enforceability of arbitration agreements have been challenged in court. Let`s take a closer look at arbitration agreement with case laws.

In the case of AT&T Mobility LLC v. Concepcion, the Supreme Court of the United States upheld the enforceability of an arbitration agreement that waived the right to bring a class action lawsuit. The plaintiffs argued that the waiver was unconscionable, but the court found that the Federal Arbitration Act (FAA) preempted state laws that prevented such agreements. This ruling has had a significant impact on the inclusion of class action waivers in arbitration agreements.

Another case that had a significant impact on the enforceability of arbitration agreements was Epic Systems Corp. v. Lewis. In this case, the court held that a class action waiver in an arbitration agreement was valid and enforceable under the FAA, even if it meant that employees would have to arbitrate disputes individually rather than collectively. This decision opened the door for employers to require mandatory arbitration agreements for their employees.

However, there have also been cases where arbitration agreements have been deemed unenforceable. In the case of Rent-A-Center, West, Inc. v. Jackson, the court held that an arbitration agreement was unenforceable because the provision that delegated the authority to decide whether the agreement was unconscionable was itself unconscionable. This case highlights the importance of drafting clear and fair arbitration agreements.

Overall, arbitration agreements have become a popular alternative to traditional litigation, but their validity and enforceability can be challenged in court. It`s essential to carefully consider the language and provisions included in arbitration agreements to ensure they are enforceable and fair to all parties involved. By understanding the relevant case law, businesses can draft effective and appropriate arbitration agreements that hold up in court.