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ARTICLE · 18 APRIL 2006

Who Determines the Enforceability of an Agreement Containing an Arbitration Clause?

When a party contests the enforceability of an agreement containing an arbitration clause, should the issue be determined by an arbitrator or a court?

United StatesLitigation, Mediation & Arbitration
Barry Heller
Barry Heller
John Dwyer
John Dwyer

When a party contests the enforceability of an agreement containing an arbitration clause, should the issue be determined by an arbitrator or a court? The United States Supreme Court recently addressed this issue in Buckeye Check Cashing, Inc. v. Cardegna. The Court held that when a party challenges the validity of the contract containing the arbitration clause as a whole, and not specifically the arbitration clause within it, the issue is to be determined by an arbitrator, not a court. The Court’s decision should bring some certainty to an issue that had resulted in a lack of uniformity in the courts.

Buckeye

Alleged Agreement Containing Arbitration Clause Violates Florida Laws

In Buckeye, a customer of a check-cashing store brought a putative class action suit in Florida state court alleging that the interest rates charged by the store on various deferred payment transactions, under which the store would provide cash to customers in exchange for a personal check in the amount of

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