Los Angeles, CA asked in Arbitration / Mediation Law for South Dakota

Q: Am I still bound by an arbitration clause if the author of the contract is the one in breech of said contract?

Service contract includes an arbitration clause, and states I must seek arbitration in South Dakota. The author is the one in breech of said contract and I live in California.

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1 Lawyer Answer
David H. Relkin
David H. Relkin
  • Arbitration & Mediation Lawyer
  • Manhasset, NY

A: You are asking a very common question. The question ordinarily comes up in the context of fraud, and not breach of contract. For instance, if the contract was fraudulent, is one bound by the terms of the contract, including the arbitration provision? While many believe that a contract induced by fraud abrogates the arbitration provision, this is false. In such a case, the parties must arbitrate the fraud since the arbitration provision provides for the manner of resolving even fraudulent conduct. This is because arbitration provisions are somewhat unique in that the other provisions of a contract induced by fraud could become unenforceable, while the arbitration provision does not.

Thus, arguing from the extreme to the simple, yes, you are bound by the arbitration provision to resolve the dispute.

The only case in which an arbitration provision may be stricken by a court is when the provision itself was induced by fraud, which is not your case as you presented it.

I hope this helps.

Tim Akpinar agrees with this answer

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