What is the effect of the statute of frauds on a securities arbitration award?
The statute of frauds is a legal rule requiring certain types of contracts to be in writing in order to be enforceable. In the context of securities arbitration, this rule has an important effect on the enforceability of an award. In California, the statute of frauds requires that any contract involving the transfer of stocks must be in writing. According to the California Supreme Court, this means that securities arbitration awards must also be in writing in order to be enforceable. This means that a petitioner or respondent in a securities arbitration proceeding must put any agreement reached during the arbitration process into a written arbitration award in order for it to be enforceable. The statute of frauds also serves to protect both parties involved in a securities arbitration proceeding. This is because a written arbitration award serves as evidence of the parties’ agreement to a certain outcome in the event of a dispute. Without a written award, either party may be able to dispute the terms of the agreement or even the award itself, potentially leading to costly litigation. In conclusion, in California, the statute of frauds requires that any agreement reached during a securities arbitration must be put into a written arbitration award in order to be enforceable. This serves to protect both parties involved and ensure that the agreement is binding.
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