Arbitration Drafting Arbitration Agreements and Clauses 3

Question 1

Under the Supreme Court's ruling in AT&T Mobility LLC v. Concepcion (2011), which state-law doctrine was preempted by the FAA?

Accepted Answer

A California rule that found class arbitration waivers unconscionable in consumer contracts

Answer

A New York rule requiring a minimum cooling-off period before arbitration could commence

Answer

A Texas rule mandating that arbitrators be licensed attorneys

Answer

A Florida rule allowing courts to review arbitral awards for legal error

Question 2

What is the primary purpose of including a confidentiality clause in an arbitration agreement?

Accepted Answer

To prohibit parties from disclosing the existence, proceedings, or award of the arbitration to third parties

Answer

To prevent the arbitrator from publishing the legal reasoning behind the award

Answer

To bar either party from appealing the award to any court

Answer

To restrict parties from hiring expert witnesses who have testified in prior proceedings

Question 3

What does a 'delegation clause' within an arbitration agreement accomplish?

Accepted Answer

It assigns the question of arbitrability itself to the arbitrator rather than a court

Answer

It designates a specific arbitrator by name to resolve all future disputes

Answer

It delegates the authority to modify the arbitration clause to a third-party administrator

Answer

It grants the winning party the right to delegate enforcement of the award to a collection agency

Question 4

Why might a drafter choose a 'filing fee cap' provision in a consumer arbitration agreement?

Accepted Answer

To limit the claimant's upfront costs and reduce the risk that the clause will be struck down as unconscionable

Answer

To prevent arbitration administrators from charging arbitrators above a fixed hourly rate

Answer

To ensure arbitrators are compensated equally regardless of case complexity

Answer

To restrict the arbitration institution from collecting its administrative fee until after the award

Question 5

Which international convention governs the recognition and enforcement of foreign arbitral awards and is frequently referenced in international arbitration clauses?

Accepted Answer

The New York Convention (1958)

Answer

The Vienna Convention on Contracts for the International Sale of Goods

Answer

The Hague Convention on Choice of Court Agreements

Answer

The UNCITRAL Model Law on International Commercial Arbitration

Question 6

What is the effect of an 'all disputes' arbitration clause on a statutory claim such as a Title VII employment discrimination claim?

Accepted Answer

The statutory claim is generally arbitrable under a broad clause unless Congress clearly intended to exclude it from arbitration

Answer

Statutory claims are always exempt from arbitration because courts have exclusive jurisdiction over them

Answer

The EEOC must approve the arbitration before any employment claim may proceed

Answer

The arbitrator must apply only the remedies available under the employment contract, not Title VII

Question 7

Which drafting best practice helps ensure that an arbitration clause will be enforced in the event the contract is signed via electronic means?

Accepted Answer

Incorporating an explicit acknowledgment that electronic signatures satisfy the agreement's execution requirements under the E-SIGN Act

Answer

Requiring the parties to exchange notarized paper copies within 30 days of electronic execution

Answer

Including a provision that voids the clause if either party did not use a password-protected signature

Answer

Specifying that the clause takes effect only upon the first dispute and not at contract formation