Abstract
While traditional arbitration agreements cover claims "arising out of" a specific contract, a new generation of "infinite" or "ultra-expansive" clauses seeks to mandate arbitration for any dispute between parties, regardless of a nexus to the underlying agreement. This trend has split courts: some enforce these broad terms under the federal policy favoring arbitration, while others find them unenforceable by strictly applying the textual limitations of § 2 of the Federal Arbitration Act (FAA) or state contract law defenses.
This Article addresses the challenges of claim expansion and the limitations of current judicial approaches. While enforcing the "arising out of" language in § 2 offers a potential solution, the Supreme Court’s pro-arbitration precedent and the potential impact on commercial contracts may hinder its adoption. Instead, this Article proposes an original analytical shift: treating the expansion of scope as a matter of contract formation rather than interpretation.
By severing an expansive clause into two distinct agreements, one for related claims and one for unrelated claims, courts can evaluate the latter under state contract formation rules. This approach bypasses federal presumptions that typically favor arbitration at the "scope" stage, ensuring that ultra-expansive clausal language remain a matter of consent rather than coercion, all within the existing FAA framework.