Arbitration Agreement: When Death Doesn’t Stop the Process
Arbitration agreements have become a popular alternative to traditional litigation for resolving disputes. They provide a more efficient and cost-effective way to resolve disputes, without the need for a lengthy court proceeding. However, what happens to an arbitration agreement when one of the parties dies?
In most cases, the death of a party to an arbitration agreement terminates the agreement. However, there is an exception when it comes to arbitration agreements. An agreement to arbitrate can survive the death of a party and proceed with the arbitration process.
This exception is based on the fact that an arbitration agreement is a contract between the parties. When a party dies, the contract is not automatically terminated. Instead, the agreement can continue to bind the parties’ estates and legal representatives, allowing the arbitration process to proceed.
This means that even if one of the parties to an arbitration agreement passes away, the arbitration process can still move forward. The deceased party’s estate can be substituted as a party to the agreement and the arbitration can continue with the remaining parties.
It’s important to note that the rules on the continuation of arbitration agreements after a party’s death vary from state to state. Some states have specific laws governing the continuation of arbitration agreements, while others rely on common law principles.
In addition, it’s important to ensure that the arbitration agreement itself includes provisions for the continuation of the process in the event of a party’s death. The agreement should clearly state whether the agreement survives the death of either party and what happens if one of the parties dies during the arbitration process.
In conclusion, when it comes to arbitration agreements, the death of a party doesn’t necessarily mean the end of the process. The agreement can survive the death of a party and proceed with the arbitration process. However, it’s important to carefully consider the specific rules and laws governing the continuation of arbitration agreements in your state. Additionally, ensure that the agreement itself includes provisions for the continuation of the process in the event of a party’s death.