It is well settled that state courts may apply state contract principles when determining if an arbitration clause is enforceable; however, states are prohibited from enforcing laws that treat arbitration agreements differently than other contracts. Placing arbitration agreements on an equal footing with other contracts results from judicial preference for arbitration. When a court overreaches to find an arbitration agreement to be procedurally and substantively unconscionable, the overreaching may stem from the court's erroneous preference for adjudication over arbitration. The issue becomes more apparent when the court had the option to enforce the agreement without the unconscionable provision, yet chose not to enforce the entire contract. In Wisconsin Auto Title Loans, Inc., the Wisconsin Supreme Court erred by ignoring the FAA's policy of treating arbitration and adjudication as equally legitimate fora.
Resisting Equal Footing: Did the Wisconsin Supreme Court Disguise an Assault on Arbitration,
2007 J. Disp. Resol.
Available at: https://scholarship.law.missouri.edu/jdr/vol2007/iss1/22