Are there any defenses to an arbitration agreement?

Yes, there are defenses to an arbitration agreement in Texas. Generally speaking, parties to arbitration can raise defenses such as fraud, duress or unconscionability. Fraud in an arbitration agreement occurs when one of the parties misrepresents the terms of the agreement to the other. Duress, also known as coercion, occurs when one of the parties is forced to sign the agreement under threat or intimidation. Unconscionability occurs when the terms of the agreement are so burdensome or unfair that it is not reasonable for one of the parties to agree to them. In addition, parties may invoke another statutory defense to an arbitration agreement, specifically the Texas Uniform Arbitration Act. The Act provides that a court or arbitator can invalidate an arbitration agreement when it was formed in a manner that “overreaches the public purpose of arbitration” or is generally unenforceable. The Act may be used if one of the parties is found to have used fraud or coercion in the formation of the agreement or if the agreement is found to be overly oppressive or one-sided. Finally, parties can challenge the validity of an arbitration agreement if the agreement fails to provide certain procedural protections that Texas law requires. This might include arbitrary deadlines that do not allow for a fair and equitable exchange of evidence and information, or a lack of provision for the awarding of attorney’s fees or costs.

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