March 15, 2021 Articles

A Meeting of the Minds in New Jersey

The state supreme court provides clarity on enforceable arbitration provisions after Atalese.

By Kelly A. Ringston

Two recent decisions turn the tide on an anti-arbitration trend that began with the court’s 2014 decision and provide much needed clarity for practitioners.

In 2014, in the matter of Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014), the New Jersey Supreme Court invalidated an arbitration provision in a consumer services contract because it did not explicitly state that the consumer had waived her right to seek relief from a court in the event of a dispute, and for that reason, the agreement lacked “mutual assent” to arbitrate as the parties’ sole means of dispute resolution.

Critics of the decision argued that it reflected the anti-arbitration bias that the Federal Arbitration Act (FAA) and New Jersey Arbitration Act (NJAA) were enacted to prevent and that by requiring specific—yet undefined—waiver language in otherwise clear and unambiguous agreements to arbitrate, the court was improperly treating arbitration agreements differently than other contracts. 

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