Arbitration has long been favored by parties fearful of litigation costs and the unpredictability of runaway juries. Congress enacted this pro-arbitration federal policy in the 1925 Federal Arbitration Act (FAA). See generally 9 U.S.C. § 2.
Section 2 of the FAA mandates that arbitration agreements related to contracts “evidencing a transaction involving [interstate] commerce” are binding. See, e.g., Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 277 (1995); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 401 (1967). Historically, this has embraced everything from loans to leases, including both business-to-business contracts, as well as those between businesses and consumers.