Is the pre-dispute arbitration clause in our Alabama contract enforceable?
Only through the Federal Arbitration Act. Alabama's own law is the other way: Ala. Code § 8-1-41 lists obligations that cannot be specifically enforced, and subdivision (3) is "An agreement to submit a controversy to arbitration." In Title Max of Birmingham v. Edwards the Supreme Court of Alabama stated that FAA § 2 has the effect of preempting conflicting Alabama law, in particular § 8-1-41(3), which makes predispute agreements to arbitrate unenforceable, and thereby makes enforceable a predispute arbitration agreement in a contract evidencing a transaction that involves interstate commerce; the party moving to compel bears the initial burden of producing some evidence that a contract calling for arbitration exists and that the underlying transaction involves interstate commerce.
The trap
The clause's enforceability turns on an interstate-commerce showing that the movant must actually make, not on the clause's own words. For a transaction that does not involve interstate commerce, § 8-1-41(3) is the operative Alabama rule and the agreement cannot be specifically enforced. Two points about form do emerge from the authorities above, and they are the only ones: the federal provision the Alabama court set out reaches a written provision in a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising, and § 8-1-41(6) withholds specific enforcement from an agreement whose terms are not sufficiently certain to make the precise act to be done clearly ascertainable. Beyond those, no Alabama form requirement for an arbitration clause was found, and nothing found addresses how an FAA-governed clause interacts with a general Alabama choice-of-law clause in the same contract.
4 authorities
- statuteAla. Code § 8-1-41enactment date not established
The words that state the rule
The following obligations cannot be specifically enforced: (1) An obligation to render personal service; (2) An obligation to employ another in personal service; (3) An agreement to submit a controversy to arbitration; (4) An agreement to perform an act which the party has not power lawfully to perform when required to do so; (5) An agreement to procure the act or consent of the wife of the contracting party or of any other third persons; or (6) An agreement, the terms of which are not sufficiently certain to make the precise act which is to be done clearly ascertainable.
The words that state the rule
Section 2 of the Federal Arbitration Act, 9 U.S.C. § 1 et seq., provides, in pertinent part: "A written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." Section 2 has the effect of preempting conflicting Alabama law, in particular § 8-1-41(3), Ala.Code 1975, which makes predispute agreements to arbitrate unenforceable.
The words that state the rule
It thereby makes enforceable a predispute arbitration agreement in a contract evidencing a transaction that involves interstate commerce.
The words that state the rule
Title Max had the initial burden of producing "some evidence" that a contract calling for arbitration exists and that the underlying transaction involves interstate commerce.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.