What is the Federal Arbitration Fairness Act?
The Federal Arbitration Fairness Act (FAA) is a federal law that was enacted in 1925 to promote fairness and accessibility to arbitration proceedings. The FAA is applicable in the state of Texas and it prevents any state or federal law from invalidating an arbitration agreement that is just and reasonable and entered into without fraud or overreaching. The FAA allows parties to a dispute to enter into an arbitration agreement that sets forth the procedure for resolving the dispute through arbitration proceedings rather than going to court. The arbitration agreement should include the name of the arbitrator, the procedure to be followed, and time limits for resolving the dispute. The arbitration agreement can also include provisions to bind the parties to the agreement. The FAA also requires that both parties be given a reasonable opportunity to present their case and to be notified of any decision or award made by the arbitrator. The arbitrator must be impartial and the parties should be treated fairly and the same throughout the arbitration proceedings. The reasoning behind the FAA is to provide a cost-effective way for parties to a dispute to resolve their differences. It is also easier to enforce the contractual agreement by allowing the parties to settle their dispute through arbitration rather than court proceedings. In the end, the FAA is designed to promote fairness and accessibility to arbitration proceedings in Texas.
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