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Agreements to Arbitrate

Given the sometimes staggering costs of litigation, written contracts will often contain provisions containing agreements to arbitrate a dispute in the event of disagreement or possible breach of contract. With an arbitration, an independent third-party makes a binding decision after each party has an opportunity to be heard. The typical rules of civil procedure, evidence and the “safety net” of appeals are usually not present. Therefore, several positives and safeguards present in a judicial setting are simply not present in an arbitration setting.

Mindful of this, Missouri Courts have certain guidelines in place when interpreting arbitration provisions. On appeal, a contract compelling arbitration is reviewed de novo, meaning without deference to the trial court’s conclusion. Triach Indus., Inc. v. Crabtree, 158 S.W.3d 772, 774 (Mo. 2005). Arbitration is a matter of contract, and a party cannot be required to arbitrate a dispute that it has not agreed to arbitrate. Dunn Indus. Grp., Inc. v. City of Sugar Creek, 112 S.W.3d 421, 435 (Mo. 2003). Missouri’s legislature, moreover, has certain requirements in place to make some arbitration clauses enforceable; for example — in some contracts — the contract must often a contain a statement in ten point font and in all caps which states that “THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.”

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