Is this arbitration clause enforceable in Connecticut, and can a non-consenting party be made to arbitrate?
A written agreement to arbitrate future controversies arising out of a written contract is 'valid, irrevocable and enforceable, except when there exists sufficient cause at law or in equity for the avoidance of written contracts generally' (General Statutes § 52-408). But arbitration rests on consent: a person can be compelled to arbitrate a dispute only if, to the extent that, and in the manner which, he has agreed to do so, and the arbitration provision is treated as an agreement separate and distinct from the broader contract, so a court may enforce only the arbitration agreement the parties actually made (MBNA America Bank v. Boata). The party resisting arbitration won that threshold point in Boata: the court agreed with the Appellate Court that the judgment of the trial court had to be reversed and the case remanded, and the judgment of the Appellate Court was affirmed.
The trap
Two limits from the texts read. First, for a construction contract for work on a construction site located in Connecticut, a clause requiring disputes to be arbitrated 'in or under the laws of a state other than Connecticut' is void under § 42-158m, regardless of whether the contract was executed in Connecticut; 'construction contract' is defined in § 42-158i as a contract for construction, renovation or rehabilitation in Connecticut on or after October 1, 1999, and excludes public works or other building contracts with the state, the United States, another state or a municipality, HUD-funded or HUD-insured contracts or projects, owner-contractor contracts of $25,000 or less and the subcontracts that result from them, and buildings intended for residential occupancy containing four or fewer units. Second, consent is a threshold question for the court: Boata quotes the rule that 'a party who contests the making of a contract containing an arbitration provision cannot be compelled to arbitrate the threshold issue of the existence of an *387 agreement to arbitrate', and treats the arbitration provision as an agreement separate and distinct from the broader contract. Federal Arbitration Act preemption was not researched for this rule.
7 authorities
- statuteConn. Gen. Stat. § 52-408enactment date not established
The words that state the rule
An agreement in any written contract, or in a separate writing executed by the parties to any written contract, to settle by arbitration any controversy thereafter arising out of such contract, or out of the failure or refusal to perform the whole or any part thereof, or a written provision in the articles of association or bylaws of an association or corporation of which both parties are members to arbitrate any controversy which may arise between them in the future, or an agreement in writing between two or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, or an agreement in writing between the parties to a marriage to submit to arbitration any controversy between them with respect to the dissolution of their marriage shall be valid, irrevocable and enforceable, except when there exists sufficient cause at law or in equity for the avoidance of written contracts generally, subject to the requirements of subsection (e) of section 46b-66 , in the case of an award with respect to a dissolution of marriage.
The words that state the rule
It is well established that [arbitration is a creature of contract. ... [A] person can be compelled to arbitrate a dispute only if, to the extent that, and in the manner which, he has agreed so to do.
The words that state the rule
Therefore, the arbitration provision in an agreement is effectively an agreement that is separate and distinct from the broader contract, and a court of law may enforce only those agreements that the parties actually make.
- statuteConn. Gen. Stat. § 42-158menactment date not established
The words that state the rule
Any provision in a construction contract for the performance of work on a construction site located in this state that purports to require that any dispute arising under the construction contract be mediated, arbitrated or otherwise adjudicated in or under the laws of a state other than Connecticut shall be void and of no effect, regardless of whether the construction contract was executed in this state.
- statuteConn. Gen. Stat. § 42-158ienactment date not established
The words that state the rule
As used in sections 42-158i to 42-158n , inclusive, unless the context otherwise requires: (1) “Owner” means any individual, corporation, nonprofit corporation, partnership, limited partnership, limited liability company or other business entity that is the owner of record or lessee of real property upon which construction, renovation or rehabilitation is to be or is being performed pursuant to a construction contract regarding such real property. (2) “Construction contract” or “contract” means any contract for the construction, renovation or rehabilitation in this state on or after October 1, 1999, including any improvements to real property that are associated with such construction, renovation or rehabilitation, or any subcontract for construction, renovation or rehabilitation between an owner and a contractor, or between a contractor and a subcontractor or subcontractors, or between a subcontractor and any other subcontractor. “Construction contract” or “contract” does not include (A) any public works or other building contract entered into with this state, the United States, any other state, and any municipality or other political subdivision of this state or any other state, (B) a contract or project funded or insured by the United States Department of Housing and Urban Development, (C) a contract between an owner and a contractor for an amount of twenty-five thousand dollars or less or a subcontract which results from such a contract, or (D) a contract for a building intended for residential occupancy containing four or less units.
The words that state the rule
a party who contests the making of a contract containing an arbitration provision cannot be compelled to arbitrate the threshold issue of the existence of an *387 agreement to arbitrate.
The words that state the rule
we agree with the Appellate Court that the judgment of the trial court must be reversed and the case remanded for further proceedings. The judgment of the Appellate Court is affirmed.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.