Federal Arbitration Act
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| Long title | An Act To make valid and enforceable written provisions or agreements for arbitration of disputes arising out of contracts, maritime transactions, or commerce among the States or Territories or with foreign nations |
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| Acronyms (colloquial) | FAA |
| Nicknames | Federal Arbitration Act |
| Enacted by | the 68th United States Congress |
| Effective | January 1, 1926 |
| Citations | |
| Public law | [http://legislink.org/us/pl-68-401 Pub.L. 68–401] |
| Statutes at Large | ch. 213, 43 Stat. 883 |
| Legislative history | |
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| United States Supreme Court cases | |
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Moses Cone Mem. Hosp. v. Mercury Constr. Corp. (1983) Southland Corp. v. Keating (1984) Shearson/American Express Inc. v. McMahon (1987) Buckeye Check Cashing, Inc. v. Cardegna (2006) Preston v. Ferrer (2008) Hall Street Associates, L.L.C. v. Mattel, Inc. (2008) AT&T Mobility v. Concepcion (2011) |
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The United States Arbitration Act (Pub.L. 68–401, 43 Stat. 883, enacted February 12, 1925, codified at 9 U.S.C. § 1 et seq.), more commonly referred to as the Federal Arbitration Act or FAA, is an act of Congress that provides for judicial facilitation of private dispute resolution through arbitration. It applies in both state courts and federal courts, as was held constitutional in Southland Corp. v. Keating. It applies where the transaction contemplated by the parties "involves" interstate commerce and is predicated on an exercise of the Commerce Clause powers granted to Congress in the U.S. Constitution.
The FAA provides for contractually-based compulsory and binding arbitration, resulting in an arbitration award entered by an arbitrator or arbitration panel as opposed to a judgment entered by a court of law. In an arbitration, the parties give up the right to an appeal on substantive grounds to a court.
Once an award is entered by an arbitrator or arbitration panel, it must be "confirmed" in a court of law; and once confirmed, the award is reduced to an enforceable judgment, which may be enforced by the winning party in court, like any other judgment. Under the FAA awards must be confirmed within one year; while any objection to an award must be challenged by the losing party within three months. An arbitration agreement may be entered "prospectively" (ie., in advance of any actual dispute), or may be entered into by the disputing parties once a dispute has arisen.
The Supreme Court ruled in Hall Street Associates, L.L.C. v. Mattel, Inc. that the grounds for judicial review specified in the FAA may not be expanded, even if the parties to the arbitration agreement agree to allow expanded review of the decision.
On June 20, 2013, the Court ruled in American Express Co. v. Italian Colors Restaurant that class action waivers contained in mandatory arbitration clauses were valid even if plaintiffs prove that it would not be economically practicable to maintain these actions individually.
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