Arbitration & Mediation

Arbitration Bill Amended, May Affect All Florida Contracts

By Christopher B. Hopkins, Esq.

If you do business in Florida and use written contracts after July 1, you may need to hire a lawyer. A Florida House Bill which began as an anti-arbitration proposal passed the Civil Justice & Courts Policy Committee this week in an amended version which barely mentions arbitration -- but now mandates revisions to every contract for goods and services in Florida.

Specifically, for any contract signed after July 1, 2009, this bill would require all conditions, procedures or remedies to be stated in bold print in its own separate paragraph – and initialed by each party. The effect? Almost all “standard form” contracts would need to be amended. Moreover, the signing of common contracts would also require initialing of paragraphs or else un-initialed provisions would be invalid.

As previously reported, Florida House Bill HB 1135 began as an anti-arbitration bill with a number of provisions which would essentially turn Florida into an arbitration-hostile state. The 3/23/09 Staff Analysis accurately pointed out some procedural errors (e.g., arbitrators are not “certified”) but further raised the specter that the bill violated Article I, Section 10 of the Florida Constitution (“no... law impairing the obligation of contracts shall be passed”).

On March 24, the bill was significantly amended down to this version, which eliminates all but one reference to arbitration. In part one, any conditions or procedures relating to breach or termination must be disclosed along with any available remedy or right to cure. This would include arbitration, mediation, and other provisions which set out consequences for non-performance. In part two, each of those contract provisions must be in bold print, individual paragraphs, and must be initialed by both parties.

A new 3/25/09 Staff Analysis was hustled out, noting that "businesses and individuals will have to change their current contract forms for all goods and services..."

Christopher Hopkins, from FloridaArbitrationLaw.com, testified before the committee, raising the concern that the newly-amended bill would cause massive confusion for businesses and consumers; create a situation where a non-lawyer might not be able to write their own contracts; and would lead to bolding and initialing of so many contract provisions that the average person would simply be hunting and pecking to initial sections of a contract rather than reading and comprehending the terms.

HB 1135, which now lacks a corresponding Senate Bill, travels next to the Insurance, Business & Financial Affairs Policy Committee.

Full post as published by Florida Arbitration Law on March 28, 2009 (boomark / email).