THE ARBITRATION AGREEMENT AND ITS ENFORCEABILITY IN NEW JERSEY
Arbitration in New Jersey is governed by the New Jersey Arbitration Act and NJ case law. Since arbitration is contractual, the courts will enforce mandatory arbitration provisions in contracts. In fact, there is a specific NJ statute that makes mandatory arbitration requirements in a contract enforceable.
N.J.S.A. (New Jersey Statute Annotated) 2A:24-1 states:
A provision in a written contract to settle by arbitration a controversy, whether the controversy arise out of contract or otherwise, shall be valid and enforceable, except as may other exist at law or in equity.
N.J.S.A. 2A:24-2 provides further that:
Two or more persons may in writing submit to arbitration a controversy existing between them, whether the controversy arises out of a contract or the refusal to perform the whole or a part thereof or out of any other matter.
In mandating the use of arbitration to address future disputes in a contract or other legal relationship, the parties can by agreement limit or expand the scope of the arbitration proceeding but they are bound to go to arbitration in accordance with their agreement. Our courts will not rewrite a contract between parties to limit or broaden the scope of arbitration or otherwise make it more fair, efficient or forceful.
Before agreeing to arbitration in a contract, contact Fredrick P. Niemann, Esq., an experienced NJ arbitration attorney, to assist you in clearly defining the terms and conditions of an arbitration proceeding. You can reach him at (888) 800-7442 or email him at fniemann@hnlawfirm.com.
As a result, for better or for worse, the parties control the applicability and scope of arbitration in their contract, which will be enforced in court.
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Fredrick P. Niemann, Esq.,
a NJ Arbitration Law Attorney
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HOW ARE DISPUTES REGARDING WHETHER A DISPUTE IS SUBJECT TO ARBITRATION RESOLVED IN NEW JERSEY?
Perhaps your agreement is unclear whether the nature of your disagreement is subject to arbitration. Maybe you read the contract such that you are not bound to arbitrate the dispute under the terms of the contract. If there is a dispute whether arbitration of a particular issue is mandated under a NJ contract, that dispute must generally be resolved by the courts of New Jersey, subject to the terms of the agreement. Neither the Arbitration Association nor an arbitrator can make that decision but will refer it to the arbitrator for final decision.
The courts in NJ will read and interpret the arbitration language in the contract and evaluate whether the claim falls within the scope of mandating arbitration. However, the court will not rule on the merits of the dispute.
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