Law Commons^™

Get The Best Of Both Worlds: Illusory Arbitration Agreements, Desiree Shay

Journal of Dispute Resolution

This Note addresses the clauses in franchise-franchisee agreements that preserve the right for a franchisor to unilaterally alter the terms of arbitration after the franchise relationship has begun. A majority of courts, applying state contract law, have held that these clauses are unenforceable due to a lack of consideration, making the contract illusory. However, courts still come to different conclusions because each court has to follow state contract law. The United States Supreme Court’s holding on this issue might not be able to have full effect because the Federal Arbitration Act requires that courts rely on state law. The Seventh …