Supreme Court Holds Arbitration Agreements in Electronic Form Are Valid

Fawzy v. Fawzy, 199 N.J. 456 (Sup. Ct., July 1, 2009) – In this case, the New Jersey Supreme Court recognized, for the first time, that an arbitration agreement can be valid even when created in electronic form. Although the New Jersey Arbitration Act defines a record necessary to establish an agreement to arbitrate as “information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form,” some parties resisting arbitration have argued that arbitration agreements are only valid when inscribed in some sort of “traditional writing.” This decision dispels that notion and recognizes that agreements memorialized in electronic form will be valid to bind the parties, so long as the other required elements are met.

Note: This article was published in the August 2009 issue of the New Jersey eAuthority.