What is the Federal Arbitration Act?

The Federal Arbitration Act (FAA) is a United States federal law that specifically governs the power and enforceability of arbitration agreements and allows courts to enforce arbitration agreements between parties in interstate commerce. This means that parties who have agreed to arbitrate their disputes are able to enforce the arbitration agreement in a court, as opposed to having to go through lengthy and expensive litigation. The FAA also sets up a system of procedures and regulations for arbitration proceedings. The FAA was passed by Congress in 1925 in an effort to avoid drawn out litigation litigation and encourage arbitration as a means of settling disputes. The Act seeks to promote the efficient resolution of disputes by providing that parties to arbitration agreements will be bound by them and that courts must enforce them. This means that parties must abide by the terms of an arbitration agreement and are not allowed to back out of it once they have agreed. In the state of Texas, the FAA is recognized and enforced. The courts of Texas have made clear that the FAA preempts Texas common law when there is a dispute about the enforceability of an arbitration clause. Furthermore, the Texas Supreme Court has held that arbitration agreements are governed by the FAA and are enforceable in the same manner as any other contract.

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What is the Federal Arbitration Act?

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