Federal Arbitration Act Purpose
"The Federal Arbitration Act was originally enacted in 1925, 43 Stat. 883, and then reenacted and codified in 1947 as Title 9 of the United States Code.
Its purpose was to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other contracts. (Dean Witter Reynolds Inc. v. Byrd [(1985)] 470 U.S. 213, 219-220, 84 L. Ed. 2d 158, 105 S. Ct. 1238, and n. 6.)" ( Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20, 24, 114 L. Ed. 2d 26, 111 S. Ct. 1647.)
"The primary substantive provision" ( Moses H. Cone Hospital v. Mercury Constr. Corp. (1983) 460 U.S. 1, 24, 74 L. Ed. 2d 765, 103 S. Ct. 927) of the FAA is 9 United States Code section 2 (section 2), which states:
"A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."
The phrase "involving commerce" in section 2 is unique in federal statutes. (Allied-Bruce Terminix Cos. v. Dobson (1995) 513 U.S. 265, 273, 130 L. Ed. 2d 753, 115 S. Ct. 834.)
It has been construed broadly. "The word 'involving,' like 'affecting,' signals an intent to exercise Congress' commerce power to the full." (Id. at p. 277; cf. Perry v. Thomas (1987) 482 U.S. 483, 490, 96 L. Ed. 2d 426, 107 S. Ct. 2520; see Annot., 130 L. E. 2d 1189, 1202-1203.)
The Federal Arbitration Act "rests on the authority of Congress to enact substantive rules under the Commerce Clause." (Southland Corp. v. Keating (1984) 465 U.S. 1, 11, 79 L. Ed. 2d 1, 104 S. Ct. 852.)
"In enacting 2 of the federal Act, Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration." (Southland Corp. v. Keating, supra, 465 U.S. at p. 10.)
The Federal Arbitration Act was designed to be enforceable in state courts as well as federal courts. (Id. at pp. 12-16.)