Senate Bill No. 135
Introduced By crippen
A Bill for an Act entitled: "An Act eliminating the special notice of arbitration provision required for contracts; amending section
27-5-114, MCA; and providing an immediate effective date."
WHEREAS, in Doctor's Associates, Inc. v. Casarotto, No. 95-559, U.S. (1996), the United States Supreme Court held that the notice requirement in 27-5-114(4), MCA, was preempted by section 2 of the Federal Arbitration Act.
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 27-5-114, MCA, is amended to read:
"27-5-114. Validity of arbitration agreement -- exceptions. (1) A written agreement to submit an existing controversy
to arbitration is valid and enforceable except upon
such grounds as that exist at law or in equity for the revocation of a
(2) A written agreement to submit to arbitration any controversy arising between the parties after the agreement is made is
valid and enforceable except upon
such grounds as that exist at law or in equity for the revocation of a contract. Except as
permitted under subsection (3), this subsection does not apply to:
(a) claims arising out of personal injury, whether based on contract or tort;
(b) any contract by an individual for the acquisition of real or personal property, services, or money or credit
the total consideration to be paid or furnished by the individual is $5,000 or less;
(c) any agreement concerning or relating to insurance policies or annuity contracts except for those contracts between insurance companies; or
(d) claims for workers' compensation.
(3) A written agreement between members of a trade or professional organization to submit to arbitration any controversies
arising between members of the trade or professional organization after the agreement is made is valid and enforceable
such grounds as that exist at law or in equity for the revocation of a contract. (4) Notice that a contract is subject to arbitration pursuant to this chapter shall be typed in underlined capital letters on the
first page of the contract; and unless such notice is displayed thereon, the contract may not be subject to arbitration."
NEW SECTION. Section 2. Effective date. [This act] is effective on passage and approval.