NJ Appellate Division Clarifies Arbitration Agreements

In a recent ruling by the Appellate Division of the New Jersey Superior Court, the Court declined to enforce an arbitration award finding that the failure to include in the arbitration agreement a forum that would replace the right to a jury trial was sufficient to indicate that there was not a “meeting of the minds.” In Flanzman v. Jenny Craig, Inc., the Appellate Division overturned the Trial Court’s Order compelling arbitration holding that the parties lacked a “meeting of the minds” because of the failure to specify the arbitral forum, or a process for selecting a forum. The Appellate Division concluded that this failure to specify meant the parties could not know what rights would replace the right to a jury trial, which they were waiving. Importantly, the Appellate Division did not speculate as to what words would be sufficient; however, it was held that any language indicating that the parties to the arbitration agreement understood what rights would be replacing the right to a jury trial were sufficient to create mutual assent.

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