Arbitration : The Severability Doctrine

Question

User Dale M. wrote the following response on SE:

An arbitration agreement in a contract is severable I.e. it is an independent contract and remains valid (assuming it is valid) even if the primary contract is void or terminated

We know that an arbitration agreement can be enforced even when the underlying contract is deemed to be void. In Largoza v. FKM Real Estate Holdings, Inc. (N.J. App. Div., Sept. 2022), the issue of whether the underlying contract is void ab initio did not preclude enforcement of an arbitration (or of forum selection) clause that is in and of itself valid.

But how do we know that it can be enforced even when the primary contract is expired?

Are there any case precedents in N.J or United States Supreme Court that specifically upheld an arbitration clause beyond the expiration of the primary contract?

Answer 1

how do we know that it can be enforced even when the primary contract is expired?

Enforceability follows from logic.

For context, your citation about "void ab initio" originates from the last paragraph in this answer. That last paragraph posits, as implication, the enforceability of an [arbitration] agreement "for controversies about a contract that for a while was valid and binding".

Given that an arbitration clause or agreement is enforceable in the extreme case scenario of an underlying contract that was never valid, it would be inconsistent for courts to vary enforceability of arbitration clauses in scenarios that are [comparably] less extreme. Temporary validity of a contract is less extreme than a scenario where a contract was never valid. Expiration of a contract connotes that the contract is/was valid for a while.

The linked answer also points out that conditioning enforceability [of arbitration] on the expiration status of the underlying contract would allow a party to evade the arbitration clause altogether by means of selective timing. That ability would contravene public policy. In fact, pragmatic grounds aside, a reasonable party typically would not agree to an important clause knowing that the counterparty can manipulate (i.e., evade) it arbitrarily.