Final answer:
The best argument against an arbitration clause being binding is the lack of consideration. The parol evidence rule and the statute of frauds are less likely to invalidate an arbitration clause, unless specific conditions apply. So the correct answer is option 1.
Step-by-step explanation:
The best argument that the arbitration clause is not binding is likely to be lack of consideration. In legal terms, consideration refers to the benefit or value that each party agrees to in a contract. An arbitration clause may be considered not binding if there was no consideration to support the agreement to arbitrate. This means that if one party did not receive something of value in exchange for agreeing to the arbitration clause, the clause could be invalidated due to lack of consideration.
Arguments concerning policies against arbitration or the parol evidence rule are less likely to succeed, as arbitration is generally favored in the interest of efficiently resolving disputes, and the parol evidence rule prohibits the use of oral or written statements outside the four corners of the written contract to contradict or supplement the contract's terms.
However, this rule could potentially apply if the arbitration agreement was made after the contract was signed, and the signed contract did not allow for such modifications. The statute of frauds may also not be the strongest argument unless the arbitration agreement itself falls into a category that requires a written agreement by law, such as agreements concerning the sale of real estate or contracts that cannot be fulfilled within one year.