Can someone be bound to arbitrate without signing the contract? Ellsworth v. The American Arbitration Association Explained

In Ellsworth v. The American Arbitration Association, the Utah Supreme Court addressed whether a person can be compelled to arbitrate when their name appears on a contract but they never signed it. The case provides important guidance on the direct and specific evidence standard required to enforce arbitration agreements against nonsignatories.

Background and Facts

Stanford Ellsworth married Carol Lee Naylor, who owned a home in Salt Lake City. After tree damage, Naylor negotiated repair contracts with Lowell Construction. Both contracts listed Ellsworth and Naylor as “Owners” on the cover pages, but only provided one signature line labeled “Owner,” which only Naylor signed. When disputes arose, Lowell filed arbitration demands against both parties. Ellsworth sought declaratory relief that he was not bound by the arbitration clauses.

Key Legal Issues

The court examined whether Ellsworth was bound to arbitrate under two theories: first, whether his name appearing on the contracts constituted assent to arbitration, and second, whether his participation in contract-related decisions bound him under nonsignatory estoppel or agency doctrines.

Court’s Analysis and Holding

The Utah Supreme Court held that direct and specific evidence of an agreement to arbitrate requires “non-inferential evidence” of agreement between the particular parties. The court found that merely listing someone’s name on a contract drafted by another party, without their signature, was insufficient evidence of assent to arbitration. The discrepancy between listing two owners but providing only one signature line created ambiguity that was construed against the drafter, Lowell Construction. Additionally, the court rejected arguments that Ellsworth’s participation in contract discussions bound him under estoppel or agency theories, finding no evidence that Naylor had authority to act as Ellsworth’s agent.

Practice Implications

This decision reinforces Utah’s strict approach to arbitration agreements, requiring clear evidence of assent rather than allowing inference from circumstantial conduct. Practitioners should ensure that all parties intended to be bound by arbitration provisions actually sign the agreement or provide other direct evidence of assent. The case also demonstrates that contract ambiguities regarding arbitration will be strictly construed against the drafter, emphasizing the importance of clear drafting when multiple parties are involved.