--- title: "Are your contracts subject to arbitration? Here’s something new in South Carolina law." canonicalUrl: "https://wyche.com/insights/blog/posts/are-your-contracts-subject-to-arbitration-heres-something-new-in-south-carolina-law/" excerpt: "Two key points in an agreement to arbitrate disputes are the choice of law and limitation on remedies available. The recent decision by the South Carolina Court of Appeals in 315 Corley CW LLC v Palmetto Bluff Development, LLC , Appellate Case No. 2022-001587 (November 13, 2024), threw out an arbitration agreement in an interpretation…
Read More" datePublished: "2024-11-19T11:26:42-05:00" dateModified: "2024-12-03T17:15:44-05:00" --- - Are your contracts subject to arbitration? Here’s something new in South Carolina law. [Home](https://wyche.com/) » Are your contracts subject to arbitration? Here’s something new in South Carolina law. [** Henry Parr](https://wyche.com/author/hparr/) ** ** ** # Are your contracts subject to arbitration? Here’s something new in South Carolina law. Two key points in an agreement to arbitrate disputes are the choice of law and limitation on remedies available. The recent decision by the South Carolina Court of Appeals in [*315 Corley CW LLC v Palmetto Bluff Development, LLC *](https://www.sccourts.org/media/opinions/advSheets/no442024.pdf), Appellate Case No. 2022-001587 (November 13, 2024), threw out an arbitration agreement in an interpretation of South Carolina law which could be of great interest to our friends and clients, whether they want to maximize the possibility of enforcing an arbitration agreement or might want to avoid one.  *Corley* was a dispute about the enforceability of an arbitration clause in the Club Membership Agreement for the Palmetto Bluff Club. Anyone buying property in Palmetto Bluff is required to join the Club and execute the Club Membership Agreement, which states that it is subject to arbitration under the South Carolina version of the Uniform Arbitration Act and contains many terms favorable to the Club – notably, the Club’s power to modify the agreement unilaterally. And, like many arbitration clauses, the arbitration agreement prohibited the award of treble damages and punitive damages. Club members and others brought suit in circuit court challenging changes the Club planned to make that would limit access to and use of the Club facilities by short-term renters. They then asked the court to invalidate the arbitration clause as unconscionable because it prevented treble damages. The circuit court agreed, and the Court of Appeals affirmed. This case shows the importance of choice of law language when drafting agreements with arbitration clauses. The Court of Appeals said that the choice of  South Carolina law in the contract meant that the parties had agreed not to apply the provisions of the Federal Arbitration Act, which meant that the trial court, rather than the arbitrator, had jurisdiction to resolve the unconscionability issue – even though the arbitration clause stated that the rules of the American Arbitration Association (which would have allocated that decision to the arbitrator) would apply to any dispute. *Corley *also shows the importance of carefully considering any limitation of remedies. The Court of Appeals found the arbitration clause unconscionable because the plaintiffs lacked any “meaningful choice in entering the agreement” and the agreement contained “oppressive and one-sided” terms that no reasonable person would accept. The contract gave the Club the unilateral right to modify any provision at will and, furthermore, denied the plaintiffs the treble damages that they claimed under the South Carolina Unfair Trade Practices Act. The Court of Appeals concluded that, even though the plaintiffs were “wealthy purchasers of secondary homes,” they were in an “unequal bargaining position” vis-a-vis the seller of the real estate and had no “meaningful choice” as to the arbitration agreement.   * # Henry L. Parr, Jr. Clients rely on Henry to manage their most serious challenges.  He has handled a broad spectrum of high stakes problems, lawsuits, and arbitrations for businesses and individuals for more than thirty years, often for returning clients. Henry has represented plaintiffs and defendants in complex litigation in state and federal trial and appellate courts, and also frequently sits as an arbitrator on a wide range of complex business and health care disputes. He has presented cases to juries and has also presented appeals to the South Carolina Court of Appeals, the South Carolina Supreme Court, the United States Court of Appeals for the Fourth Circuit and the United States Supreme Court. His cases have included class actions involving software, electrical outlets, insurance, securities,  and arbitration, as well as individual lawsuits involving a wide range of complex civil litigation matters such as defective products, wrongful termination, commission disputes, conspiracy, patent infringement, slander, trade secrets,  unfair trade practices, constitutional law, healthcare, insurance coverage, and contractual disputes. In addition, Henry has represented clients before administrative law judges. He frequently serves as an arbitrator in matters involving claims up to and exceeding $60,000,000, including class actions. He is a Fellow of the Chartered Institute of Arbitrators and is a member of a number of arbitration panels, including the London Court of International Arbitration (LCIA), the Hong Kong International Arbitration Center (HKIAC), the International Center for Dispute Resolution (ICDR), Institute for Conflict Prevention & Resolution’s Panel of Distinguished Neutrals (CPR), American Health Lawyers Association arbitration panel (AHLA), and the American Arbitration Association’s national large and complex case panel and appellate panels (AAA). Henry also advises clients on antitrust, distribution and trade secret issues and in the preparation of distribution and trade secret agreements. Henry leads our Antitrust and Trade Regulation and Health Care practice groups.  He served as an advisor to the American Law Institute project to draft the Restatement of the Law of Liability Insurance. 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