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Arbitration Waiver Unenforceable Because Parents Had No Apparent (or Other) Authority (PA)

May 5, 2023

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A defendant seeking to enforce an arbitration agreement against a spouse or family member, such as a child, of an individual who is a signatory to an arbitration agreement, must establish agency on the part of the signatory, which thereby gave that signatory the power to bind the spouse or family member.

In<em> <a href="">Santiago v. Philly Trampoline Park, LLC</a></em>, a recent Pennsylvania Superior Court case, a father took two minors, one of which was his own five-year-old child, to a trampoline park in August of 2018. To play at the trampoline park, the parent had to complete and execute a “Participant Agreement, Release and Assumption of Risk” that was six pages long.  The waiver had specific language which bars the parent and minors respectively from recovery due to injury to the parent or the minor children, as well as waiving the right to have a claim determined by a jury and therefore be decided by arbitration. The five-year-old child was injured at the park, and the other parent subsequently filed a personal injury claim. The defendant trampoline park filed a motion to compel arbitration, but the trial court denied the motion and ruled that as a matter of law the mother was not bound by the father’s execution of the participant agreement because he was not acting as the agent of the mother when he signed it. Moreover, the trial court ruled that parents do not have authority to waive their children’s rights to file a lawsuit and agree to binding arbitration for injuries.

Simply put, a family member acting on the behalf of another family member does not mean that agency can be inferred.  Thus, the parents who brought suit on behalf of the minor children were not required to submit to binding arbitration because there was no authority on the part of the waiver-signing parents to act as either the suing-parents’ agents, or the minor children’s agents.

Minor children themselves cannot agree to arbitration agreements (or any contracts) due to a lack of capacity and that such contracts are voidable. Moreover, even though parents are the natural guardians of their minor children, a natural guardian is not legally capable of controlling the estate of the minor, title of which, by statute, remains with the minor. Unlike in New Jersey or Ohio, a Pennsylvania parent cannot bind a minor child to arbitration based on the reasoning that the arbitration is merely a forum in which to exercise the minor’s substantive rights, rather than a waiver of the substantive right to bring a cause of action.

Thus, the appellate courts made it clear that just because a parent agrees to arbitrate, does not mean a minor child will be bound by that agreement.

Thanks to Ryan Hunsicker for his contribution to this article.  Should you have any questions, please contact <a href="">Tom Bracken</a>.

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