The State of Mandatory Arbitration in Tennessee after Berent v. CMH HomesKnoxville Bar Association Arbitration and Dispute Resolution (ADR) Section CLE (2015)
- Mandatory individual arbitration clauses have been used with increasing regularity in order to discourage litigation and limit the costs of resolving disputes.
- Mandatory arbitration clauses are most familiar in consumer agreements, but are also used in many other contexts, including finance agreements and employment contracts.
- Such clauses take myriad forms, but they typically are drafted by the party with the greater bargaining power and inserted as boilerplate (non-bargained-for) provisions in the contract.
- State courts have a history of striking down one-sided arbitration provisions using common law avoidance doctrines such as unconscionability and public policy.
- However, in 2010, the U.S. Supreme Court indicated that the Federal Arbitration Act (“FAA”) preempts state policies in this area. Subsequent decisions by the Supreme Court have confirmed this.
- Berent v. CMH Homes provided the Tennessee Supreme Court with the first opportunity to reconsider some of its pre-2010 jurisprudence in this area in light of intervening U.S. Supreme Court action.
Publication DateOctober 5, 2015
Citation InformationMatthew Lyon. "The State of Mandatory Arbitration in Tennessee after Berent v. CMH Homes" Knoxville Bar Association Arbitration and Dispute Resolution (ADR) Section CLE (2015)
Available at: http://works.bepress.com/matthew_lyon/16/