Third Circuit Clarifies Legal Standard for Evaluating Enforceability of Arbitration Agreements

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In a decision issued on March 21, 2017, the Third Circuit Court of Appeals clarified the legal standard to be applied in the context of whether to enforce an arbitration agreement under the Federal Arbitration Act. Aliments Krispy Kernals, Inc. v. Nichols Farms, No. 16-1975 (3d Cir. 2017).

"The legal standard is simply that we apply the relevant state contract law to questions of arbitrability, which may be decided as a matter of law only if there is no genuine issue of material fact when viewing the facts in the light most favorable to the nonmoving party."

In announcing this standard, the Third Circuit has recommended that District Courts avoid using the language "express and unequivocal" when deciding if there are geninue issues of material fact as to an arbitration agreement's existence.

To read the Third Circuit's complete opinion click here.

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