commercial arbitration class 7

continuing fed preemption

whether it's an agency, etc, signalling out a claim as non arb in the state -- no good

even if it involves an exercise of state policy and the fed courts have said that if arb is under a statute then they're not going to allow

treatment of contract provisions are no good

other issues that one way or another effect arb like waiver: pro arb make it difficult to waive right to arb, but state standards for waiver that are more lax get preempted.

under FAA s. 10, the grounds are very limited, but say nothing about the merits.

when we did the intro chapter, we saw that while there's manifest disregard, it basically means so totally F off the wall that the arb's must have ignored on purpose. and more fund, when people arb commercially, they aren't willignly submitting to equity instead of strict legal applications.

SCOTUS -- whether parties in agreement by contract could broaden the standard of review.

for instance could a reviewing court vacate as to a matter of law, as a district court would?

given that there's so much in the fed law of arb as it beign a creature of contracts, expectation that the SCOTUS would say "fine, if that's what the parties want" but the court didn't do that based on teh wording of the statute. said the stat didn't allow courts to overturn except for the reasons set forth in the statute. but if parties want to agree to broader review, they can maybe do under state law of arb which presents an interesting issue:

if you have an FAA case, can you still adopt the state rule of arb principles of review of awards?

this is important because at state/common law, there's recognition that parties can broaden the standeard of review.

but scotus is saying that there may not be any preemption. if state law permits the parties to broaden the standard of review, that kind of law wouldn't be preempted.

remember, one of the benefits of arb is that you don't have broad review, making the process more efficienct. so weiskopf finds it surprising that preemption doesn't go to matters of reviewing awards.

arb are common in certain types of transactions. usually, they are in adhesion contracts, and very often, form contracts involving sale of goods. and very common in the computer industry. for better/worse, there's some issues:
2-207 battle of the forms of merchants

usually, the seller wants arbitration. usually the buyer makes the offer. the seller sends out some type of writing with an arb provision. the buyer says nothing and the transaction is completed. are the arb clauses accepted? YES (last shot doc, which by the way, 2-207 was designed to change)

with 2-207: the merchant buyer sends a printed purchase order that says nothing about arbitration. the seller sends a form that says the seller will ship etc and on the back in small print, there's an arb clause

is the arb clause important and materially altering? it depends.

the point is to avoid unfair surprise.
why might a forum definitely allow the arbitration? prior dealings, industry custom,

dorton: no battle of the forms, because the order was made over the phone. there's a certain logical appeal to that. but they still apply 2-207 because they're both merchants.

what if it was that a contract formed over the telephone, and then the seller sent out the form afterwards. does this change the circumstance? NO -- the last form doc still applies, because the courts don't want to have to figure out the tricky details of this timing under the code.

2-207 is pretty stupid is because all it does is change the last shot doc to the first shot doc: the fortuity of going last is just now the fortuity of going first.

under 2-207, if you don't want any possibility of someone changing your offer, you can say that your acceptance has to be completely conditioned on subsequent changes.

like the itoh case --

no gap filler for arbitration in the code, so you would lose the right to arbitrate.

shutz v. carnival cruise lines may have been a little extreme with the court's enforcement of the arb clause.

hill v. gateway: so long as there's some relatively uncomplicated way of returning the item, 2-207 doesn't apply because the parties are not both merchants, and that under 2-204, you have a flexible approach to contract formation and the courts have

the statute requires that the arb clause must be written - doesn't say a damn thing about it being signed!!!

common law arbitration, which is a different beast because it's not under statute...

you do sometimes see courts say, this person didn't sign the writing with the arb clasue. signature is a sign of assent. some relationships will bind you, like EE/ER relationship, even though you never sign the arb agreement.

non-signatory third parties, non-privy parties can be bound by arbitration clauses in the contract.

piercing the corp veil: there's all types of finagles. remember that the point of the corp is to shield indivs from personal liability. what if you have a single-held corp and/or a parent company that just uses the corp as a shell? one way is that

if X and Y have a contract, and Z is a 3d party beneficiary under the contract, Z can push the arb clause too.

see the Shaffer case.
if companies are good, they will have a provision that makes the client arb with the parent and brokerage clearance company.