May an Arbitration Agreement Calling for Institutional Arbitration be Denied Enforcement Because of the Cost Involved?* – Vol. 8 No. 2

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AuthorHans Smit**

Published: July 1997

Operation and Effects
Enforceability of Arbitration Agreements

Description: Judges appear to find it awfully difficult not to interfere with arbitration agreed upon by the parties. The decision by the Appellate Division, First Department, of the Supreme Court of New York, in Brower v. Gateway 2000, Inc. provides another example.

Gateway involved a class action in the New York Supreme Court by Gateway customers who had purchased their computers by mail or telephone. The defendants pleaded an arbitration clause as a bar. The arbitration clause, calling for ICC arbitration, was contained in a document shipped with the computer. A note to the customer provided that the customer accepted Gateway’s terms and conditions if it kept the computer more than thirty (30) days after delivery. The plaintiffs in this case had all done so.

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*Current Developments
**Stanley H. Fuld Professor of Law and Director, Center for International Arbitration and Litigation Law, Columbia University.