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Can I require customers to sign contracts with binding arbitration clauses in Iowa? What are the requirements?

Yes, you can require customers to sign contracts with binding arbitration clauses in Iowa, subject to certain requirements.

Requirements for Valid and Enforceable Arbitration Agreements in Iowa

According to Iowa Code section 679A.1, a written agreement to submit to arbitration an existing controversy is valid, enforceable, and irrevocable unless grounds exist at law or in equity for the revocation of the written agreement. Additionally, a provision in a written contract to submit to arbitration a future controversy arising between the parties is valid, enforceable, and irrevocable unless grounds exist at law or in equity for the revocation of the contract. However, this subsection shall not apply to any of the following:

  • A contract of adhesion.
  • A contract between employers and employees.
  • Unless otherwise provided in a separate writing executed by all parties to the contract, any claim sounding in tort whether or not involving a breach of contract.

Therefore, to ensure that your arbitration agreement is valid and enforceable, you should ensure that it is not a contract of adhesion, that it does not involve claims sounding in tort, and that it is not a contract between employers and employees.

Fees and Expenses of Arbitration

Regarding the fees and expenses of arbitration, Iowa Code section 679A.10 states that unless otherwise provided in the agreement to arbitrate, and except for counsel fees, the arbitrators’ expenses and fees and any other expenses incurred in the conduct of the arbitration shall be paid as provided in the award.

Limitations of Arbitration Proceedings

If the claim sought to be arbitrated would have been barred by limitation of time pursuant to chapter 614 had it been asserted in a court of this state, a party may assert the limitation as a bar to the arbitration on an application to the court [1.2].

Proceedings to Compel or Stay Arbitration

On application of a party showing an agreement described in section 679A.1 and the opposing party’s refusal to arbitrate, the district court shall order the parties to proceed with arbitration. However, if the opposing party denies the existence of a valid and enforceable agreement to arbitrate, the district court shall proceed to the determination of the issue and shall order arbitration if a valid and enforceable agreement is found to exist. If no such agreement exists, the court shall deny the application [1.3].

Prohibition of Arbitration in Certain Contracts

A provision in a contract which attempts or purports to require arbitration of any dispute arising under this chapter is void at the option of the foreclosed homeowner [2.1].

In summary, you can require customers to sign contracts with binding arbitration clauses in Iowa, subject to certain requirements. You should ensure that your arbitration agreement is not a contract of adhesion, does not involve claims sounding in tort, and is not a contract between employers and employees. Additionally, you should be aware of the limitations of arbitration proceedings and the prohibition of arbitration in certain contracts.

Source(s):
Jurisdiction

Iowa