Friday, March 24, 2006
The New York State Court of Appeals issued a decision yesterday reaffirming a “long-standing rule” that an arbitration clause in a written agreement is enforceable even if the agreement is not signed. The issue is not whether the contract was signed but, rather, whether the parties intended to be bound by it.
An architectural firm agreed to undertake an expansion and renovation of the facilities of God’s Battalion of Prayer Pentecostal Church. The firm sent the Church a standard architectural form contract that contained an arbitration clause. The Church did not sign and return the form contract but maintained it in its files. When the job wasn’t performed to the Church’s satisfaction, it sued the architects for breach of contract and malpractice. The Church did not want to submit to arbitration and argued that it had not signed the contract. The problem for the Church, however, was that it relied on the very same form agreement in its breach of contract claims against the architectural firm. The court held that the Church could not “pick and choose” enforcement of the provisions of the contract the served its purposes. Because the Church intended to be bound by the contract, it was compelled to arbitrate.
God's Battalion of Prayer Pentecostal Church, Inc. v. Miele Assocs. (N.Y. Mar. 23, 2006).
[Meredith R. Miller]