State Law of Contract Formation in the Shadow of the Federal Arbitration Act

Abstract

The Federal Arbitration Act (FAA)1 was passed in 1925 to ensure the enforceability of arbitration clauses and codify the procedures through which such clauses would be enforced.2 Ever since its passage, state courts and legislatures have attempted to define the role that remains for state arbitration law in light of the Act's sweeping provisions.3 The dimensions of this role were sharply narrowed in a trilogy of opinions by the U.S. Supreme Court.4 These opinions broadened the scope of the FAA, perhaps beyond that which Congress originally intended,5 and established the FAA as a body of substantive federal law that preempts all contradictory state arbitration law.6 This broad interpretation of the FAA has been a source of controversy within the Supreme Court, among various federal courts, and between federal and state courts. The case which defined the preemptory effect of the FAA, Southland Corp. v. Keating,' revealed disagreement among the Justices over the FAA's preemptory force. Justices O'Connor and Rehnquist strongly dissented, arguing that the majority opinion utterly fail[ed] to