What is a non-signatory to a binding arbitration agreement?

A non-signatory to a binding arbitration agreement is a party that is not involved in the agreement but may be affected by it. In North Carolina, binding arbitration agreements are enforceable and generally non-signatories may be bound by the agreement despite not signing it. This can be done by a process called “involuntary joinder.” This means that a third-party can be involuntarily added to the contract when it is legally recognized that their participation is necessary or beneficial to a successful arbitration process. Examples of non-signatories include any potential parties that have a stake in the outcome of the arbitration, such as investors, creditors, insurers, and employees. Non-signatories may be added to the agreement if they are related to the dispute or if they may potentially benefit from the outcome. If a non-signatory is not legally required to be involved in the arbitration process, they cannot be added. For this reason, it is important to consider all potential parties who may be affected by an arbitration agreement before signing. Creating a legally binding agreement is a very serious process and it is important to be thorough in order to protect all parties involved. All parties, even non-signatories, must be aware of how the agreement may affect them in order to ensure an equitable outcome.

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What is a non-signatory to a binding arbitration agreement?

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