Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance
Ask a Question

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

Requirements for binding arbitration clauses in Michigan

Yes, you can require customers to sign contracts with binding arbitration clauses in Michigan. However, there are certain requirements that must be met.

According to Michigan law, a person initiates an arbitration proceeding by giving notice in a record to the other parties to the agreement to arbitrate in the agreed manner between the parties or, in the absence of agreement, by certified or registered mail, return receipt requested and obtained, or by service as authorized for the commencement of a civil action. The notice must describe the nature of the controversy and the remedy sought [3.1].

If a panel is used for arbitration, it shall consist of 1 or more members of the commission’s staff to be appointed by the director of the telecommunications division and the director of the regulatory affairs division, and 1 administrative law judge appointed by the administrative law manager assigned to the commission. If a non-staff arbitrator is appointed, it shall be with the concurrence of the parties and may be a person employed by, or contracted with, the state of Michigan, or may be a non-employee contractor, who shall be engaged and compensated by the parties. The administrative law judge or person performing the duties of the administrative law judge shall chair the panel, issue any communications to the parties, and rule on procedural matters [1.1].

An arbitrator may conduct an arbitration in the manner that the arbitrator considers appropriate for a fair and expeditious disposition of the proceeding. The authority conferred on the arbitrator includes the power to hold conferences with the parties to the arbitration proceeding before the hearing and, among other matters, determine the admissibility, relevance, materiality, and weight of any evidence. If an arbitrator orders a hearing, the arbitrator shall set a time and place and give notice of the hearing not less than 5 days before the hearing begins. Unless a party to the arbitration proceeding makes an objection to lack or insufficiency of notice not later than the beginning of the hearing, the party’s appearance at the hearing waives the objection. On request of a party to the arbitration proceeding and for good cause shown, or on the arbitrator’s own initiative, the arbitrator may adjourn the hearing from time to time as necessary but shall not postpone the hearing to a time later than that fixed by the agreement to arbitrate for making the award unless the parties to the arbitration proceeding consent to a later date. The arbitrator may hear and decide the controversy on the evidence produced although a party who was duly notified of the arbitration proceeding did not appear [3.2].

If a person shows an agreement to arbitrate and alleges another person’s refusal to arbitrate under the agreement, the court shall proceed summarily to decide the issue and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate. The court shall not refuse to order arbitration because the claim subject to arbitration lacks merit or grounds for the claim have not been established [3.3].

However, there are certain nonconforming clauses that violate a provision of the act, or are inconsistent, ambiguous, or misleading, or are exceptions and conditions that unreasonably or deceptively affect the risk purported to be assumed in the general coverage of a policy. An arbitration provision that requires the insured to travel to a location outside the county of the insured’s residence, unless the insured consents to another location after the arbitral dispute occurs, is one such clause [2.1].

Conclusion

In conclusion, you can require customers to sign contracts with binding arbitration clauses in Michigan. However, the notice must describe the nature of the controversy and the remedy sought, and the arbitration must be conducted in a fair and expeditious manner. If a person shows an agreement to arbitrate and alleges another person’s refusal to arbitrate under the agreement, the court shall proceed summarily to decide the issue and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate. It is important to note that certain nonconforming clauses, such as an arbitration provision that requires the insured to travel to a location outside the county of the insured’s residence, are prohibited [2.1][3.1][3.2][3.3].

Source(s):
Jurisdiction

Michigan