Key Terms
ADR is used to resolve disputes among
Businesses (B2B), employers and employees (B2E), businesses and consumers (B2C).
DEFINITION
A neutral decision maker who presides over arbitration proceedings.
Constitutional basis
FAA operates under the broadest permissible exercise of congressional power under the Commerce Clause.
Result
Mandatory arbitration clauses are enforceable for virtually any transaction involving interstate commerce — which is ver
Process
1. Parties present their cases to the arbitrator 2.
Example
A small buyer who depends entirely on one supplier, but that supplier doesn't need the buyer's business because it repre
If mediation fails
Parties can pursue arbitration or proceed to court.
Mandatory arbitration
Required when (1) the parties signed a contract requiring it for that type of dispute, or (2) state law requires it.
Voluntary arbitration
Parties agree to arbitrate because they believe the benefits outweigh the costs of litigation.
CONFIRMATION
The process by which a court converts an arbitration award into a court judgment. This creates the legal mechanism to ac
Courts review ONLY
1. Whether the arbitration award covered matters beyond the issues submitted 2.
FAIRNESS IN ARBITRATION
B2B vs. B2E vs.
Confirmation
Not the same as an appeal. Confirmation just turns the award into a collectible court judgment.
FAA preemption
Federal law overrides state attempts to create court forums for disputes covered by mandatory arbitration clauses in con
Unconscionability escape
The FAA does not block state courts from voiding arbitration clauses that are unconscionable under state contract law. M