Incorporation by Reference of an Arbitration Clause Is a Simple Matter … Isn’t It?
Drafting an arbitration clause for an agreement may seem like a straightforward matter most of the time, writes Gilbert A. Samberg for Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. It may even be as simple as incorporating by reference an arbitration provision in another document or agreement. Or is it?
In the article, he discusses a recent federal district court ruling, Cooperativa Agraria Industrial Naranjillo Ltda. v. Transmar Commodity Group, Ltd., that may offer a cautionary lesson before making such assumptions.
“In Naranjillo, the decisive principle was that an offeree cannot assent to an offer unless the offeree knows of its existence. The Court found that there had been no showing that Naranjillo actually knew of the existence of the arbitration clause terms,” Samberg explains.