Supreme Court Enforces Arbitration Clause And Confines Court Of Appeals To The Arguments Raised By The Parties

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In Richmont Holdings, Inc. v. Superior Recharge Sys., L.L.C., an asset purchase agreement included a binding arbitration clause. No. 12-0142, 2013 Tex. LEXIS 71 (Tex. January 25, 2013). The seller of the business signed an employment agreement with the acquiring company, but that agreement did not have an arbitration clause. The seller later sued for damages, alleging the acquiring company fraudulently induced him to enter into the asset purchase and employment agreements. The trial court denied a motion to compel arbitration. In the trial court, the employee did not contest the validity of the arbitration agreement and did not complain that the dispute was outside the scope of the agreement. But the court of appeals concluded that the arbitration provision had no application to the employee's lawsuit and that the claims were outside of the scope of the clause. The Texas Supreme Court reversed, holding that the court of appeals' conclusion that the arbitration provision had no application to the lawsuit was contrary to the parties' contentions and had no support in the record.

Topics:  Arbitration, Arbitration Agreements

Published In: Alternative Dispute Resolution (ADR) Updates, Civil Procedure Updates, General Business Updates, Labor & Employment Updates, Mergers & Acquisitions Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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