Contractual Jury Waiver Provision Enforced Because Party Seeking Jury Primarily Claimed Breach of that Contract Rather Than Fraudulent Inducement

Contracts often contain provisions in which the parties waive their right to a jury trial of any disputes relating to the contract. On the other hand, fraud claims have a way of avoiding all or part of contractual promises and obligations. One remedy for fraudulent inducement, for example, is rescission—which if established could void an entire contract.

There has been a fair amount of dispute as to the circumstances under which a contractual jury waiver provision can be rendered unenforceable based upon a claim that the contract in which it was contained was induced by fraud. See,e.g., my post, Jury Waiver Issues Concerning Fraudulent Inducement Claims. Courts have continued to apply a different analysis to challenges of arbitration provisions and jury waivers based upon claims of fraud. See my article in NYLitigator Magazine, The Impact of Fraud Claims on Contractual Arbitration and Jury Waiver Provisions.

Although it may seem illogical, courts have rendered a jury waiver provision ineffective merely based upon a claim of fraudulent inducement of the contract containing the waiver, even before the fraud is established and based solely upon an allegation of fraud. I say this may seem illogical because the party seeking to avoid the jury waiver obtains that relief even before its claim of fraud is actually proven.

Read the full blog post here.