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Legal Memorandum: Enforceability of an Arbitration Agreement

Issue: Is an arbitration agreement that waives legal rights enforceable?

Area of Law: Alternative Dispute Resolution, Business Organizations & Contracts
Keywords: Arbitration agreement; Waiver of legal rights; Enforceability
Jurisdiction: Federal, Virgin Islands
Cited Cases: None
Cited Statutes: 9 U.S.C. § 2; 5 V.I.C § 815
Date: 12/01/2008

The arbitration provisions are unenforceable for other reasons, as well.  The Federal Arbitration Act (FAA) generally compels enforcement of arbitration agreements, but not if those agreements fail to meet standards of state or territorial law that are generally applicable to all contracts.  9 U.S.C. § 2.  As a matter of generally applicable Virgin Islands law, no contract that waives a right guaranteed by the U.S. Constitution is enforceable unless the waiver was both knowing and voluntary.  5 V.I.C § 815. 

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