Arbitration Clauses May Survive Termination of Underlying Agreement
June 25, 2021 | Aging Services Risk Management
The U.S. Court of Appeals for the First Circuit has found that an arbitration agreement between two parties remained in effect even when the residential contract between the parties may have expired. Originally, the resident of an assisted-living facility and her daughter sued a facility for allegedly failing to properly administer thyroid medication to the resident. The federal district court held that the arbitration agreement no longer applied to the complaint's resolution, but the Court of Appeals reversed, finding that the Federal Arbitration Act applied.
The resident moved into an assisted-living facility in March 2016. She was presented with a residency agreement that specified the terms of her residency. The agreement contained an arbitration clause specifying that all claims arising out of her residency would be submitted to a mutually agreeable arbitrator for resolution. The residency agreement was executed by the resident's daughter, who was also her attorney-in-fact. The daughter did not amend or seek...