Arbitration Clauses and Contracts in New Jersey

Submitted by New Jersey Civil Lawyer, Jeffrey Hark.

This case addresses New Jersey law regarding the ability of parties to a enter into negotiations and have a meeting of the minds regarding the use of an arbitration clause in their contract. Arbitration is a tool used by two parties to a contract to resolve their legal differences without the use of the formal court system. For many years the courts in New Jersey and the federal courts have supported “arbitration clauses”. This enables the parties to allegedly quickly and efficiently resolve disputes without significant legal fees and extend it delays often experience in the Superior Court of New Jersey and the Federal District Courts.

This case outlines the process parties entering into a contract must address.  Initially the contract between the parties must explicitly outline their intention to remove all matters to the arbitration forum. The next threshold question becomes whether, in this case, post employment issues are covered in the arbitration clause. The court did not address these issues because it believe the record was not established enough and remitted the matter to the trial court.   However the court outlined the state of New Jersey case while addressing this issue and the legal minefield that parties must keep in mind when they are initially negotiating contracts and determining what disagreements will be governed by the arbitration clause they decide.  Recently, the Supreme Court of the United States and Justice Breyer addressed these issues in a Comcast contract case.  Many of the issues are identical and many consumer contracts could be effect by the issues outlined herein.

Read the full case here.