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

Here is the response to your query:

Requirements for binding arbitration clauses in South Carolina

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

According to SCCL 15-48-10 [4.1], an agreement to arbitrate is valid and enforceable if it is in writing and signed by the parties or if it is contained in an electronically transmitted record that evidences an agreement to arbitrate. Additionally, the agreement must clearly state that the parties are waiving their right to a jury trial and any other right to adjudication by a court of law.

Furthermore, SCCL 15-48-30 [4.1] provides that if the arbitration agreement does not provide a method of appointment of arbitrators, there shall be three arbitrators with one chosen by the party making the demand for arbitration, one chosen by the party against whom demand is made, and a third chosen by those two arbitrators.

It is important to note that there are certain types of contracts where hold harmless clauses purporting to indemnify the promisee against liability for damages arising out of bodily injury or property damage proximately caused by or resulting from the sole negligence of the promisee, its independent contractors, agents, employees, or indemnitees are against public policy and unenforceable [1.1]. However, this does not affect a promise or agreement whereby the promisor shall indemnify or hold harmless the promisee against liability for damages resulting from the negligence, in whole or in part, of the promisor, its agents or employees [1.1].

Proceedings to compel or stay arbitration

If a party refuses to arbitrate despite the existence of a valid agreement to arbitrate, the other party may apply to the court to compel arbitration under SCCL 15-48-20 [4.2]. If the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party, otherwise, the application shall be denied [4.2]. On application, the court may also stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate [4.2].

Conclusion

In summary, you can require customers to sign contracts with binding arbitration clauses in South Carolina, provided that the agreement is in writing, signed by the parties, and clearly states that the parties are waiving their right to a jury trial and any other right to adjudication by a court of law. Additionally, if the arbitration agreement does not provide a method of appointment of arbitrators, there shall be three arbitrators with one chosen by the party making the demand for arbitration, one chosen by the party against whom demand is made, and a third chosen by those two arbitrators. If a party refuses to arbitrate despite the existence of a valid agreement to arbitrate, the other party may apply to the court to compel arbitration under SCCL 15-48-20.

Source(s):
Jurisdiction

South Carolina