Question

Shannon and Honey enter into a contract. Part of the contract provides that, if a dispute arises concerning the contract, the parties will submit the dispute to binding arbitration. Later, a dispute arises between Shannon and Honey concerning the definition of a term used in the contract. Before Shannon can file a claim in arbitration, Honey files a civil lawsuit in the Superior Court of North Carolina. The court will likely:

a. Order the parties to arbitrate the dispute.
b. Hear and decide the lawsuit.
c. Hear the lawsuit and then order the parties to arbitrate.
d. None of the above.

Answer 1

The court will likely order the parties to arbitrate the dispute.

Step-by-step explanation:

In this case, the court will likely order the parties to arbitrate the dispute (option a). This is because the contract between Shannon and Honey contains a provision that requires them to submit any disputes to binding arbitration. This means that before either party can file a lawsuit, they must first attempt to resolve the dispute through arbitration.

Answer 2

The court will likely order Shannon and Honey to arbitrate their dispute, as they have previously agreed upon binding arbitration in their contract. It is common for courts to enforce arbitration clauses to uphold the terms of private contracts unless there is a strong reason not to do so.

This correct answer is d)

Step-by-step explanation:

When Shannon and Honey enter into a contract that includes a clause for binding arbitration in the event of a dispute, this typically means that they have agreed to resolve their issues outside of court.

If Honey files a civil lawsuit in the Superior Court of North Carolina against the terms of the arbitration agreement, the court will likely order the parties to arbitrate the dispute.

This is because courts generally enforce arbitration agreements as they are a means of private dispute resolution that parties have contractually agreed upon, provided they are not unconscionable or violate public policy.

In this scenario, answer (a) Order the parties to arbitrate the dispute is the most likely outcome. The court's priority would be to uphold the terms of the contract, unless there were substantial reasons not to enforce the arbitration clause, such as the clause being invalid or unenforceable for reasons such as fraud or duress.

This correct answer is d)