Is this arbitration clause enforceable under the Texas Arbitration Act?
The clause itself is valid: a written agreement to arbitrate is valid and enforceable if it is an agreement to arbitrate a controversy that either exists at the time of the agreement or arises between the parties after that date, and a party may revoke it only on a ground that exists at law or in equity for the revocation of a contract. Revocation grounds are not the only bar the Act itself supplies: a court may not enforce an agreement to arbitrate if the court finds the agreement was unconscionable AT THE TIME THE AGREEMENT WAS MADE. But Chapter 171 does not apply at all to: a collective bargaining agreement between an employer and a labor union; an agreement for the acquisition by one or more individuals of property, services, money or credit in which the total consideration to be furnished by the individual is not more than $50,000; a claim for personal injury; a claim for workers' compensation benefits; or an agreement made before January 1, 1966. The under-$50,000 and personal-injury carve-outs can be opted back into, but only where the parties agree in writing AND the agreement is signed by each party and each party's attorney, and, for personal injury, only on the advice of counsel.
The trap
The attorney-signature requirement is the one that quietly defeats ordinary drafting. A perfectly standard arbitration clause in a consumer or small-services contract worth $50,000 or less falls outside the chapter unless each party's ATTORNEY signed it, and consumer agreements essentially never carry attorney signature blocks. The same is true of any personal-injury claim. The statutory unconscionability bar is fixed at formation, so a clause that becomes one-sided only in the way it is later operated is not met by § 171.022 on its own terms. Separately, this rule is about the TEXAS act only: the Federal Arbitration Act may independently govern the same clause and is not addressed here, so outside Chapter 171 is not the same as not arbitrable.
3 authorities
- statuteTex. Civ. Prac. & Rem. Code § 171.001enacted 1997-09-01
The words that state the rule
(a) A written agreement to arbitrate is valid and enforceable if the agreement is to arbitrate a controversy that: (1) exists at the time of the agreement; or (2) arises between the parties after the date of the agreement. (b) A party may revoke the agreement only on a ground that exists at law or in equity for the revocation of a contract.
- statuteTex. Civ. Prac. & Rem. Code § 171.002enacted 2025-09-01
The words that state the rule
(a) This chapter does not apply to: (1) a collective bargaining agreement between an employer and a labor union; (2) an agreement for the acquisition by one or more individuals of property, services, money, or credit in which the total consideration to be furnished by the individual is not more than $50,000, except as provided by Subsection (b); (3) a claim for personal injury, except as provided by Subsection (c); (4) a claim for workers' compensation benefits; or (5) an agreement made before January 1, 1966. (b) An agreement described by Subsection (a)(2) is subject to this chapter if: (1) the parties to the agreement agree in writing to arbitrate; and (2) the agreement is signed by each party and each party's attorney. (c) A claim described by Subsection (a)(3) is subject to this chapter if: (1) each party to the claim, on the advice of counsel, agrees in writing to arbitrate; and (2) the agreement is signed by each party and each party's attorney.
- statuteTex. Civ. Prac. & Rem. Code § 171.022enacted 1997-09-01
The words that state the rule
A court may not enforce an agreement to arbitrate if the court finds the agreement was unconscionable at the time the agreement was made.