Background of The Case
In the early 20th century, businessmen in New York began promoting the idea of legally binding arbitration to resolve disputes as a less costly alternative to litigation. Courts were hostile to the idea, especially in interstate commerce, so in 1925 arbitration advocates persuaded Congress to pass the Federal Arbitration Act (FAA), providing rules and a legal framework for arbitration. Among its provisions was a requirement that parties who had agreed to arbitrate do so before going to court.
The FAA made no impact on the federal courts until the 1958 Second Circuit decision in Robert Lawrence Co. v. Devonshire Fabrics, Inc., which held that the requirement to arbitrate meant that any challenge to the contract itself had to go before an arbitrator, not just disputes over possible breaches of contract. Only the arbitration clause itself could be challenged in court first.
Read more about this topic: Prima Paint Corp. V. Flood & Conklin Mfg. Co.
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