| 4. The language in Section 6(c), "whether a contract |
| containing a valid agreement to arbitrate is enforceable," is |
| intended to follow the "separability" doctrine outlined in |
| Prima Paint Corp. v. Flood & Conklin Manufacturing Co., 388 |
| U.S. 395 (1967). There the plaintiff filed a diversity suit in |
| federal court to rescind an agreement for fraud in the |
| inducement and to enjoin arbitration. The alleged fraud was in |
| inducing assent to the underlying agreement and not to the |
| arbitration clause itself. The Supreme Court, applying the FAA |
| to the case, determined that the arbitration clause was |
| separable from the contract in which it was made. So long as |
| no party claimed that only the arbitration clause was induced |
| by fraud, a broad arbitration clause encompassed arbitration |
| of a claim alleging that the underlying contract was induced |
| by fraud. Thus, if a disputed issue is within the scope of the |
| arbitration clause, challenges to the enforceability of the |
| underlying contract on grounds such as fraud, illegality, |
| mutual mistake, duress, unconscionability, ultra vires and the |
| like are to be decided by the arbitrator and not the court. |
| See II Ian Macneil, Richard Speidel, and Thomas Stipanowich, |
| Federal Arbitration Law §§15.2-15.3 (1995) [hereinafter |
| "Macneil Treatise"]. A majority of States recognize some form |
| of the separability doctrine under their state arbitration |
| laws. Old Republic Ins. Co. v. Lanier, 644 So. 2d 1258 (Ala. |
| 1994); U.S. Insulation, Inc. v. Hilro Constr. Co., 705 P.2d |
| 490 (Ariz. Ct. App. 1985); Erickson, Arbuthnot, McCarthy, |
| Kearney & Walsh, Inc. v. 100 Oak Street, 35 Cal. 3d 312, 197 |
| Cal.Rptr. 581, 673 P.2d 251 (1983); Hercules & Co. v. Shama |
| Rest. Corp., 613 A.2d 916 (D.C. Ct. App. 1992); Brown v. KFC |
| Nat'l Mgmt. Co., 82 Hawaii 226, 921 P.2d 146 (1996); Quirk v. |
| Data Terminal Systems, Inc., 739 Mass. 762, 400 N.E.2d 858 |
| (Mass. 1980); Weinrott v. Carp, 32 N.Y.2d 190, 298 N.E.2d 42, |
| 344 N.Y.S.2d 848 (1973); Weiss v. Voice/Fax Corp., 94 Ohio |
| App. 3d 309, 640 N.E.2d 875 (Ohio 1994); Jackson Mills, Inc. |
| v. BT Capital Corp., 440 S.E.2d 877 (S.C. 1994); South |
| Carolina Pub. Serv. Auth. v. Great Western Coal, 437 S.E.2d 22 |
| (S.C. 1993); Gerwell v. Moran, 10 S.W.3d 28 (Tex. Ct. App. |
| 1999); Schneider, Inc. v. Research-Cottrell, Inc., 474 F. Supp |
| 1179 (W.D. Pa. 1979) (applying Pennsylvania law); New Process |
| Steel Corp. v. Titan Indus. Corp., 555 F. Supp. 1018 (S.D. |
| Tex. 1983) (applying Texas law); Pinkis v. Network Cinema |
| Corp., 512 P.2d 751 |
| (Wash. 1973). |
