Cancellation of Contract Cancels Arbitration Clause – Legal Firm Recap

1. The settlement agreement between a teacher and a former student included a mutual release and an arbitration clause for any disputes.
2. The teacher found evidence that the student was responsible for defamatory blog posts and suspected her of creating new ones after the settlement agreement was signed.
3. The teacher declared the 2018 settlement agreement null and void due to the student’s conduct, and demanded the return of payments made under the agreement.
4. The student responded by email, stating that she would no longer honor the clauses in the agreement and described actions she planned to take, including publishing a book about the teacher’s alleged sexual assault.
5. The Eleventh Circuit Court of Appeals affirmed the district court’s decision to deny the defendant’s motion to compel arbitration, as the parties had mutually rescinded the settlement agreement containing the arbitration clause. 1. The Florida district court denied the former student’s motion to compel arbitration, finding that the parties had rescinded the 2018 settlement agreement.
2. The Eleventh Circuit upheld the district court’s decision, stating that a subsequent mutual rescission allows parties to release each other from their obligations, including arbitration.
3. The appellate court also referenced a previous case, Dasher v. RBC Bank (USA), which held that arbitration could not be compelled if a subsequent agreement without an arbitration clause entirely superseded the earlier agreement under state law. 1. The teacher and student had a brief dating relationship.
2. After the relationship ended, the student accused the teacher of sexual assault.
3. Local police and prosecutive authorities investigated the accusations but closed their files with no action.
4. A cyber-smear campaign began against the teacher.
5. The Eleventh Circuit made no comment on the truth or falsity of the background facts of the case.
6. This case summary also makes no comment on the truth or falsity of the matters at issue in the case.

Rescission of Agreement Defeats Arbitration Clause


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