Arbitration agreements are a step in the right direction for alternate dispute resolution. Obviously, before a court can grant a motion to compel arbitration pursuant to such an agreement, it must find that both parties are, indeed, bound by that agreement.' Although a traditional contract law analysis is ordinarily used to determine who is bound to a contract containing an arbitration provision, when an escrow agent acting on behalf of one party to a contract binds that party to an agreement to arbitrate, traditional contract law analysis must be altered to take into account the extent of an escrow agent's power to bind its principals. This Note examines the analysis as utilized by a federal court in the Southern District of New York when confronted with such a situation and suggests that an escrow agent, by its very nature, does not possess the ability to bind its principal to an agreement to arbitrate a dispute with another party.
Karen E. Martin,
Court Lets Go of the Reins: Runaway Escrow Agent Binds Principals to Arbitration Agreement - 99 Commercial Street, Inc. v. Goldberg,
1994 J. Disp. Resol.
Available at: https://scholarship.law.missouri.edu/jdr/vol1994/iss2/4