What is the public policy exception to the enforcement of an arbitration agreement?

The public policy exception to the enforcement of an arbitration agreement in Virginia is a legal exception that applies when a party can show that an arbitration agreement is contrary to Virginia public policy. The exception has been narrowly applied by Virginia courts in the past, but it remains an important part of Virginia policy. When an arbitration agreement is established between two or more parties, it is often treated like a contract. The parties agree to bring certain disputes to be judged by an independent arbitrator, rather than a court. This agreement can be enforceable in court, and Virginia recognizes this agreement as valid. However, under the public policy exception, the Court may refuse to enforce the arbitration agreement if it is contrary to public policy. The public policy exception applies if the agreement forces a party to waive a right that is provided for in state or federal law, if it is overly restrictive in certain circumstances, or if it is otherwise unfair or unconscionable. The court will make a case-by-case determination as to whether the agreement is contrary to public policy. In all cases, the public policy exception to the enforcement of an arbitration agreement in Virginia should be understood to be a safeguard. It is important for parties to understand, prior to entering into an arbitration agreement, that it is possible for the court to reject the agreement if it violates public policy.

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What is the public policy exception to the enforcement of an arbitration agreement?

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