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

To require customers to sign contracts with binding arbitration clauses in Montana, you must ensure that the agreement meets the requirements set forth in MTCO 27-5-114 and MTCO 40-16-105.

Validity of arbitration agreement

MTCO 27-5-114 states that a written agreement to submit an existing controversy to arbitration is valid and enforceable except upon grounds that exist at law or in equity for the revocation of a contract. A written agreement to submit to arbitration any controversy arising between the parties after the agreement is made is also valid and enforceable except upon grounds that exist at law or in equity for the revocation of a contract. However, there are exceptions to this rule, including claims arising out of personal injury, contracts for the acquisition of real or personal property, services, or money or credit when the total consideration to be paid or furnished by the individual is $5,000 or less, agreements concerning or relating to insurance policies or annuity contracts except for those contracts between insurance companies, and claims for workers’ compensation.

Arbitration agreement

MTCO 40-16-105 outlines the requirements for an arbitration agreement. An arbitration agreement must be in a record signed by the parties, identify the arbitrator, an arbitration organization, or a method of selecting an arbitrator, identify the family law dispute the parties intend to arbitrate, and specify how notice to arbitrate is to be given. An agreement in a record to arbitrate a family law dispute that arises between the parties before, at the time, or after the agreement is made is valid and enforceable as any other contract and irrevocable except on a ground that exists at law or in equity for the revocation of a contract. However, an agreement to arbitrate a child-related dispute that arises between the parties after the agreement is made is unenforceable unless the parties affirm the agreement in a record after the dispute arises or the agreement was entered during a family law proceeding and the court approved or incorporated the agreement in an order issued in the proceeding. If a party objects to arbitration on the ground the arbitration agreement is unenforceable or the agreement does not include a family law dispute, the court shall decide whether the agreement is enforceable or includes the family law dispute.

Notice of arbitration

MTCO 40-16-106 states that if the parties have entered into an arbitration agreement, a party may initiate arbitration by giving notice to arbitrate to the other party in the manner specified in the arbitration agreement. If the parties have not entered into an arbitration agreement, a party may send a written request to the other party requesting that the parties agree to arbitrate and enter into an arbitration agreement that complies with MTCO 40-16-105.

Proceedings to compel or stay arbitration

MTCO 27-5-115 outlines the proceedings to compel or stay arbitration. On the application of a party showing an agreement described in MTCO 27-5-114 and the opposing party’s refusal to arbitrate, the district court shall order the parties to proceed with arbitration. If the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of that issue raised and shall order arbitration if it finds for the applying party or deny the application if it finds for the opposing party. If an issue referable to arbitration under the alleged agreement is involved in an action or proceeding pending in a court having jurisdiction to hear applications under subsection (1), the application must be made in that court. Otherwise, and subject to MTCO 27-5-323, the application may be made in any court of competent jurisdiction. An action or proceeding involving an issue subject to arbitration must be stayed if an order or application for arbitration has been made under this section. If an issue is severable, the stay may be with respect to the severable issue only. When the application is made in such action or proceeding, the order for arbitration shall include such stay. An order for arbitration may not be refused on the ground that the claim in issue lacks merit or good faith or because no fault or grounds for the claim sought to be arbitrated have been shown.

Therefore, to require customers to sign contracts with binding arbitration clauses in Montana, you must ensure that the agreement meets the requirements set forth in MTCO 27-5-114 and MTCO 40-16-105. The agreement must be in writing, signed by the parties, identify the arbitrator or arbitration organization, identify the dispute to be arbitrated, and specify how notice to arbitrate is to be given. Additionally, the agreement must not fall under the exceptions outlined in MTCO 27-5-114. If a dispute arises, the parties may initiate arbitration by giving notice to arbitrate in the manner specified in the arbitration agreement. If the opposing party refuses to arbitrate, the district court may order the parties to proceed with arbitration.

Jurisdiction

Montana

• General