Many business contracts contain arbitration provisions, which often creates a question as to whether the contracting parties must resolve their dispute in arbitration. Florida courts consider three elements when determining whether to enforce a contractual arbitration provision. They are (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived. Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla. 1999). Peter Mavrick is a Fort Lauderdale business litigation attorney. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment law, and other legal disputes in federal and state courts and in arbitration.
The second element generally requires further analysis because courts must determine the scope of the arbitration provision to decide if the claims at issue are subject to mandatory arbitration. Airbnb, Inc. v. Doe, 336 So. 3d 698 (Fla. 2022). Arbitration provisions can be narrow or broad depending on the language of the provision. Jackson v. Shakespeare Foundation, Inc., 108 So. 3d 587 (Fla. 2013). Narrow provisions typically contain the phrase, “arising out of.” Id. An example is “all claims arising out of this contact shall be arbitrated.” This type of provision will only require the contracting parties to arbitrate claims bearing a direct relationship to the contract. Id.
Conversely, broad arbitration provisions require contracting parties to arbitrate claims that have a significant relationship to the contract. Id. There must be a contractual nexus between the contract and the claim asserted. Id. In other words, resolution of the claim “requires either reference to, or construction of, a portion of the contract.” Id. Broad arbitration provisions usually contain the phrase “relating to” and often join the narrow phrase “arising out of.” For example, a broad arbitration may be written to state “all claims arising out of or relating to this contact shall be arbitrated.”