An interesting case was recently decided in the state of New York. The question was whether or not the defendant security company could demand arbitration as opposed to the consumer having its contract dispute handled by the judicial system. The defendant alarm company had a clause in its contract giving “either party” the right to have “an action or dispute” resolved by binding arbitration before an arbitrator instead of a judge in court.
The plaintiff filed an action in small claims court for damages for breach of contract, breach of warranty and fraud. The defendant alarm company made a motion to dismiss the action and to compel arbitration.