Christopher L. George, P.C.

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Don't Box Yourself Out Of Arbitration

The law is constantly changing.  Changes can come about as a result of new laws being passed. Changes can also come about as a result of decisions handed down by the Supreme Court of Alabama.  One recent decision by the Supreme Court of Alabama really drives this point home.

The case involved a contract which contained a provision requiring the customer to arbitrate any disputes. There was no dispute that the customer signed the contract.  However, the customer did not initial in a box located by the arbitration provision.  The Supreme Court of Alabama held that the fact that the customer did not initial the box by the arbitration provision even though he initialed several other boxes located beside other provisions in the contract meant that the customer was not bound by the arbitration provision in the contract. 

Perhaps what is most remarkable about this decision was that the Supreme Court of Alabama stated that while a written agreement is required for arbitration, “there is no requirement that every single provision of a contract, including the arbitration clause, must be signed in order to form part of the agreement.”  The lesson to be learned from this is that you should think long and hard about whether to put a box requiring initials by the arbitration provisions or any particular provisions of a contract. Because if you do and the customer fails to initial in all the right places, you could find yourself “boxed” out of arbitration.

If you’re in a business that regularly enters into contracts with customers, maybe it’s time you call me and allow me to review your contracts, 251-333-2233.