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An Issue Of First Impression For PA: Are Minor Children Bound To Arbitration Agreements Signed On Their Behalf?

June 9, 2023

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<span>In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2023/06/Santiago-v.-Philly-Trampoline-Park-LLC.pdf">Santiago v. Philly Trampoline Park LLC</a>,</em> the Superior Court of Pennsylvania was tasked with deciding an issue of first impression in the state: whether a parent’s role as a natural guardian entitles that parent to bind their minor child to an arbitration agreement and waive that child’s right to seek redress for injuries in a court of law.  <em>Santiago v. Philly Trampoline Park, LLC.</em>, 291 A.3d 1213, 1216 (Pa. Super. Ct., 2023).  </span>

<span>The case involved several parents bringing separate claims against the defendant, Sky Zone, a Philadelphia trampoline park.  <em>Id</em> at 1217.<em>  </em>In 2019, a mother and his two daughters visited Sky Zone and signed a “Participant Agreement, Release and Assumption of Risk” (the “Agreement”).  Among other things, the agreement provided that “if I or any of my children are injured in any way, this waiver prevents and prohibits any recovery of money from any Sky Zone related entity.”<em>  </em>After one of the children was injured at the facility, her father filed a complaint on behalf of his child.  </span>

<span>Sky zone moved to compel the arbitration agreement, signed by the other parent, contending that the Agreement was a valid agreement that both the parents and child were within its scope. </span>

<span>The Court noted that as a general rule of contract law, only the parties to an arbitration agreement may be compelled to arbitrate.  <em>  </em>That said, a party can still be compelled to arbitrate under an agreement, regardless of whether she signed it, if common law principles of agency and contract support such an obligation on her part.  </span>

<span>Whether an agency relationship exists is a question of fact, the burden of proof weighing on the party asserting the agency relationship.  An agency relationship may exist by: 1) express authority; 2) implied authority; 3) apparent authority; and/or 4) authority by estoppel. </span>

Relevant to this case is “apparent authority,” which exists where the principal, “by word or conduct” causes people with whom the agent deals to believe that the principal has granted the agent authority to act.  The focus is on the principal’s conduct to determine whether an agency relationship exists, for the purposes of this analysis, the purported agent’s conduct is irrelevant.

<span>After analyzing the issue of whether an agency relationship existed as between spouses through apparent authority and finding one did not exist because the principal had no interaction with Sky Zone, the court moved to the novel question of this case.  .</span>

<span>At the outset, the court acknowledged that the minor children could not have entered into the arbitration agreement themselves, as minors lack the capacity to contract in their own right. <em>Id.  </em>As such, the court held that minors also lack the capacity to “grant express authority to an agent to contract on their behaves, rendering any such resulting contracts voidable.”  </span>

<span>The court held that, </span>“Natural guardianship confers no inherent right to intermeddle with the property of the minor child, and the natural guardian has no inherent authority to demand or power to receive, hold or manage the minor’s property unless the natural guardian has also been appointed as guardian of the minor’s estate.” <em>Id</em>.  This is an interesting decision that we expect to be appealed.

Thanks to Hannah Garber for her contribution to this article.  Should you have any questions, contact <a href="mcare@wcmlaw.com">Matthew Care</a>.

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