LAW WEEK COLORADO
If there were ever a reason for companies to use consistent arbitration clauses in their contracts, a federal appeals court just provided it.
Ragab v. Howard was the first time a Colorado court addressed whether parties could be compelled to arbitrate when there are conflicting arbitration provisions. In its Nov. 21 majority opinion in the case, the 10th Circuit helped clear a path for a party to dodge arbitration when there’s enough discord among the arbitration clauses that apply to a claim.
In order to reduce the risk of costly and drawn-out litigation, companies have been increasingly lobbying for arbitration as an alternative to resolve a legal dispute. To that end, companies have been pushing to include arbitration clauses in more agreements with business partners, vendors and other parties.
But the recent appellate decision highlights what can go wrong when companies allow those provisions to multiply without consistency in their language.