Possible sanctions include the loss of research contracts and the revocation of academic titles.
for the revocation of any contract," 9 U. S. C. §2, the arbitration agreement must be enforced.
Accordingly, the Discover Bank rule is not a "groun[d]... for the revocation of any contract" as I would read § 2 of the FAA in light of § 4.
shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract". 9 U. S. C. §2.
(c) The Concepcions claim that the Discover Bank rule is a ground that "exist[s] at law or in equity for the revocation of any contract" under FAA §2.
The Federal Arbitration Act says that an arbitration agreement "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract". 9 U.S.C. § 2 (emphasis added).
By using the words "save upon such grounds as exist at law or in equity for the revocation of any contract," Congress retained for the States an important role incident to agreements to arbitrate.
The Concepcions argue that the Discover Bank rule, given its origins in California's unconscionability doctrine and California's policy against exculpation, is a ground that "exist[s] at law or in equity for the revocation of any contract" under FAA § 2.
2520, 96 L.Ed.2d 426 (1987), for example, we noted that the FAA's preemptive effect might extend even to grounds traditionally thought to exist "'at law or in equity for the revocation of any contract.'" Id., at 492, n. 9, 107 S.Ct.
Linguistically speaking, it falls directly within the scope of the Act's exception permitting courts to refuse to enforce arbitration agreements on grounds that exist "for the revocation of any contract". 9 U.S.C. § 2 (emphasis added).
The Ninth Circuit agreed that the provision was unconscionable under California law and held that the Federal Arbitration Act (FAA), which makes arbitration agreements "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract," 9 U. S. C. §2, did not preempt its ruling.
