In contract law, terms and conditions dictate the relationship that exists between the parties and how issues that arise may be handled (Greenberg, 2001). Whereas there are express provisions that arbitration is the way of solving issues, courts tend to favor enforceability of the clauses. The contract between Osborne Development Corp and Thomas Baker and others expressly states that by signing the documents, they would be bound by the terms stipulated. One of the terms was the provision for arbitration processes.
Statutory, arbitration clause in courts are enforceable. The Federal Arbitration Act provides that arbitration clauses in contracts should be enforceable (Arbitration of commercial, construction, employment, securities and labor disputes, 2001). It is important that one hires the services of an attorney to oversee the process of arbitration. This is because of the complex issues related to an arbitration process. In the case study, the arbitration clause binds the parties to the contract.
There is enough evidence that courts have made verdicts based on the above argument. This was the decision in the case of NCR Corp v. Korala Associates. In this case, NCR sued Korala Associates Limited for infringing copyright. The two parties were in a contract which had provisions for arbitration, effectively stating that all disputes that would arise from the contract would be decided through the arbitration process. Korala Associates Limited moved to court seeking the court’s approval for arbitration to be used. The main issue for determination was whether the court would allow arbitration to be enforced or not. The court affirmed arbitration because a controversy arose over the arbitration clause (Greenberg, 2001). The court ruled in favor of arbitration. This position was later employed in the case of Cruz v. Fargo America, Inc where the court favored the enforcement of arbitration.
References
Arbitration of commercial, construction, employment, securities and labor disputes. (2001). Minneapolis, MN: Minnesota Institute of Legal Education.
Greenberg, R. M. (2001). Enforceability of arbitration agreements in contracts of employment. Washington, DC: World Jurist Association.
