Court Construes Contract to Exclude Arbitration Provisions.
Tennessee Courts have made it very clear over the past few years that they favor arbitration and that arbitration clauses in contracts will be enforced. However, the opinion in Sumner County Board of Education v. Carden Co. Inc., is a good reminder that, despite the Courts' preference for arbitration, they will not read an arbitration provision into a contract where one does not reasonably exist.
In Carden, the parties' original contract included an arbitration provision which was deleted by a subsequent amendment. The amendment contained a paragraph stating that "all references to arbitration contained herein are deleted and replaced with the following..." Carden argued that "herein" only referred to the amended paragraph and not the remainder of the contract, and that the arbitration provisions in the remainder of the contract therefore remained viable. Carden further argued that since arbitration is favored in
After reviewing the contract as a whole, the Court concluded that Carden's argument was not reasonable. While the Court conceded that they amendment could have been drafted more clearly, it was not willing to say that the amendment was ambiguous in its effect -- i.e. to remove all references to arbitration in the contract. Accordingly, the Board was free to file an action in Court.
Again, Carden is a good reminder that, while arbitration may be favored in