prima paint flood conklin argued march decided june respondent new jersey corporation manufactured sold paint paint products wholesale customers number entered contract petitioner prima maryland corporation whereby agreed perform consulting services relating transfer operations prima agreed compete prima prima agreed pay life contract certain percentages receipts sales contract stated embodies entire understanding parties contained broad arbitration clause ny controversy arising agreement breach thereof shall settled arbitration city new york accordance rules american arbitration association almost year later first payment become due prima notified broken consulting agreement earlier agreement involving prima purchase paint business prima chief contention fraudulently represented solvent able perform obligations whereas insolvent planned file bankruptcy petition shortly executing consulting agreement responded serving notice intention arbitrate whereupon prima filed diversity action federal rescission consulting agreement basis alleged fraudulent inducement contemporaneously sought enjoin proceeding arbitration arbitration act provides written arbitration provision contract evidencing transaction involving commerce shall valid irrevocable enforceable save upon grounds exist law equity revocation contract federal suit brought upon issue referable arbitration arbitration agreement must stay action pending arbitration decided issue arbitrable agreement federal whose assistance invoked party seeking compel another arbitrate satisfied arbitration agreement honored making agreement arbitration failure comply arbitration agreement issue shall order arbitration district granted motion filed stay action pending arbitration appeals dismissed prima appeal held contract clearly evidenced transaction involving interstate commerce came within coverage arbitration act passing upon application stay arbitration act federal may consider claim fraud inducement contract generally may consider issues relating making performance agreement arbitrate pp act prescribes manner federal courts treat questions relating arbitration clauses contracts involve interstate commerce admiralty subject matter congress plainly power legislate hence state rules allocating functions arbitrator control pp since claim fraud relates inducement consulting agreement generally rather arbitration clause evidence parties intended withhold issue arbitration basis granting stay pp robert herzog argued cause filed briefs petitioner martin coleman argued cause respondent brief david brainin gerald aksen argued cause american arbitration association amicus curiae brief whitney north seymour sol corbin osmond fraenkel william isaacson nordlinger justice fortas delivered opinion case presents question whether federal arbitrator resolve claim fraud inducement contract governed arbitration act evidence contracting parties intended withhold issue arbitration question arises following set facts october respondent flood conklin manufacturing company new jersey corporation entered styled consulting agreement petitioner prima paint corporation maryland corporation agreement followed less three weeks execution contract pursuant prima paint purchased paint business consulting agreement provided period furnish advice consultation connection formulae manufacturing operations sales servicing prima trade sales accounts services performed personally chairman jerome jelin except event death disability bound duration contractual period make trade sales paint paint products existing sales territory current customers consulting agreement appended lists customers whose patronage taken prima paint return lists covenant compete services jelin prima paint agreed pay certain percentages receipts listed customers others payments exceed life agreement agreement took account possibility prima paint might encounter financial difficulties including bankruptcy corresponding reference made possible financial problems might encountered agreement stated embodies entire understanding parties subject matter finally parties agreed broad arbitration clause read part controversy claim arising relating agreement breach thereof shall settled arbitration city new york accordance rules obtaining american arbitration association contemporaneously filing complaint prima paint petitioned district order enjoining proceeding arbitration stay action pending arbitration contended issue presented whether fraud inducement consulting agreement question arbitrators district filed merits behalf prima paint charges complaint reiterated affiants attacked sufficiency prima paint allegations fraud denied misrepresentations made negotiations asserted prima paint relied exclusively upon delivery lists promise compete availability jelin contended prima paint availed considerations nearly year without claiming fraud noting prima paint position claim ignorance bankruptcy proceeding since participated therein february added revested assets march district granted motion stay action pending arbitration holding charge fraud inducement contract containing arbitration clause broad one question arbitrators proposition relied robert lawrence devonshire fabrics cir cert granted dismissed rule appeals second circuit dismissed prima paint appeal held contract question evidenced transaction involving interstate commerce controlling robert lawrence decision claim fraud inducement contract generally opposed arbitration clause arbitrators courts rule one national substantive law governs even face contrary state rule agree albeit somewhat different reasons affirm decision key statutory provisions arbitration act section provides written provision arbitration maritime transaction contract evidencing transaction involving commerce shall valid irrevocable enforceable save upon grounds exist law equity revocation contract section requires federal suit brought upon issue referable arbitration agreement writing arbitration stay action pending arbitration satisfied issue arbitrable agreement section provides federal remedy party aggrieved alleged failure neglect refusal another arbitrate written agreement arbitration directs federal order arbitration satisfied agreement arbitration made honored bernhardt polygraphic held stay provisions invoked respondent apply two kinds contracts specified act namely admiralty evidencing transactions commerce first question whether consulting agreement prima paint contract agree appeals prima paint acquired new jersey paint business serving least wholesale clients number secured assistance arranging transfer manufacturing selling operations new jersey maryland consulting agreement inextricably tied interstate transfer continuing operations interstate manufacturing wholesaling business clearer case contract evidencing transaction interstate commerce determined contract question within coverage arbitration act turn central issue case whether claim fraud inducement entire contract resolved federal whether matter referred arbitrators courts appeals differed approach question view appeals second circuit expressed case others except parties otherwise intend arbitration clauses matter federal law separable contracts embedded claim made fraud directed arbitration clause broad arbitration clause held encompass arbitration claim contract induced fraud appeals first circuit hand taken view question severability one state law state regards clause inseparable claim fraud inducement must decided lummus commonwealth oil ref cir cert denied respect cases brought federal involving maritime contracts evidencing transactions commerce think congress provided explicit answer answer found act provides remedy party seeking compel compliance arbitration agreement respect matter within jurisdiction federal courts save existence arbitration clause federal instructed order arbitration proceed satisfied making agreement arbitration failure comply arbitration agreement issue accordingly claim fraud inducement arbitration clause issue goes making agreement arbitrate federal may proceed adjudicate statutory language permit federal consider claims fraud inducement contract generally section expressly relate situations like present stay sought federal action order arbitration may proceed inconceivable congress intended rule differ depending upon party arbitration agreement first invokes assistance federal hold therefore passing upon application stay parties arbitrate federal may consider issues relating making performance agreement arbitrate concluding honor plain meaning statute also unmistakably clear congressional purpose arbitration procedure selected parties contract speedy subject delay obstruction courts remains question whether rule constitutionally permissible point made whatever nature contract involved case federal solely reason diversity citizenship since decision erie tompkins federal courts bound diversity cases follow state rules decision matters substantive rather procedural matter outcome determinative guaranty trust york question case however whether congress may fashion federal substantive rules govern questions arising simple diversity cases see bernhardt polygraphic supra concurring opinion rather question whether congress may prescribe federal courts conduct respect subject matter congress plainly power legislate answer affirmative clear beyond dispute federal arbitration statute based upon confined incontestable federal foundations control interstate commerce admiralty present case claim advanced prima paint fraudulently induced enter agreement arbitrate ny controversy claim arising relating agreement breach thereof contractual language easily broad enough encompass prima paint claim execution acceleration consulting agreement procured fraud indeed claim made prima paint ever intended legal issues relating contract excluded arbitration entirely free contract federal courts bound apply rules enacted congress respect matters contract involving commerce legislative power question prima paint requested district adjudicate preliminarily allowing arbitration proceed one intended congress delay granting stay accordingly decision dismissing prima paint appeal affirmed footnotes although letter attorneys alleged breaches consulting purchasing agreements fraudulent inducement complaint refer earlier purchase agreement alleging prima paint fraudulently induced accelerate execution closing date consulting agreement herein october october whether party seeking rescission contract ground fraudulent inducement may new york obtain judicial resolution claim entirely clear compare exercycle maratta amerotron maxwell shapiro woolen app div aff fabrex winard sales misc light disposition case need decide status issue new york law meaning maritime transaction commerce set forth act see infra conclusion amply supported affidavit submitted district prima paint president read part agreement entered parties october contemplated intended orderly transfer assets defendant plaintiff contemplated intended defendant consult advise assist help plaintiff insure smooth transition manufacturing operations maryland new jersey together sales servicing customer accounts retention said customers suggested dissent despite absence language statute indicating construe apply contracts merchants interstate shipment goods neither desire warrant amend statute find persuasive authoritative evidence contrary legislative intent see house report legislation proclaims control interstate commerce one bases legislation reaches actual physical interstate shipment goods also contracts relating interstate commerce note dissent curious narrowing statute correct necessity congress amended statute exclude certain kinds employment contracts see event anomaly urged upon us dissent manifested present case remarkable say contract purchase single paint may evidence transaction interstate commerce agreement relating facilitation purchase entire interstate paint business operation another state addition robert lawrence supra see kinoshita cir respect claims fraud inducement followed similar process analysis see metro industrial painting terminal constr cir dispute performance el hoss engineer transport american ind oil cir however found intent submit issue question arbitration appeals careful honor evidence parties intended withhold issues arbitrators reserve judicial resolution see el hoss engineer transport american ind oil supra note categories contracts otherwise within arbitration act one parties characteristically little bargaining power expressly excluded reach act see cases others discussed recent note commercial arbitration federal courts vand rev section reads part shall hear parties upon satisfied making agreement arbitration failure comply therewith issue shall make order directing parties proceed arbitration accordance terms agreement making arbitration agreement failure neglect refusal perform issue shall proceed summarily trial thereof position consistent decision moseley electronic facilities statutory scheme saving clause indicates purpose congress make arbitration agreements enforceable contracts immunize arbitration agreement judicial challenge ground fraud inducement elevate forms contract situation inconsistent saving clause true arbitration act passed years decision erie tompkins supra brought end regime swift tyson pet time enactment congress reason believe still power create federal rules govern questions general law arising simple diversity cases least absent state statute contrary congress relied power see erie supplementary admiralty commerce powers formed principal bases legislation indeed congressman graham bill sponsor house told colleagues affects contracts relating interstate subjects contracts admiralty cong rec senate report legislation similarly indicated bill relates maritime transactions contracts interstate foreign commerce sponsors legislation agreed charles bernheimer chairman arbitration committee new york chamber commerce told senate subcommittee proposed legislation follows lines new york arbitration law applying fields wherein federal jurisdiction fields admiralty foreign interstate commerce hearing subcommittee senate committee judiciary joint house senate hearings bernheimer answered yes entirely statement chairman senator sterling mind proposed legislation relates contracts arising interstate commerce joint hearings subcommittees committees judiciary julius henry cohen draftsman american bar association proposed bill said sponsor goals irst get state statute get federal law cover interstate foreign commerce admiralty third get treaty foreign countries joint hearings supra emphasis added see also joint hearings supra statement alexander rose cohen submit brief subcommittee urging jurisdictional base broader commerce admiralty powers joint hearings supra indication statute legislative history invitation go beyond powers accepted testimony took much narrower tack justice harlan joining opinion desire note also affirm judgment basis robert lawrence devonshire fabrics cir cert granted dismissed rule justice black justice douglas justice stewart join dissenting holds arbitration act matter federal substantive law compels party contract containing written arbitration provision carry arbitration agreement even though might fair trial hold entire contract including arbitration agreement void fraud inducement holds fantastic legal issue contract voidness fraud decided persons designated arbitrate factual controversies arising valid contract parties arbitrators holds adjudicate legal validity contract need even lawyers probability nonlawyers wholly unqualified decide legal issues even qualified apply law bound means sure thus forcing person forgo opportunity try legal issues courts unlike situation arbitration may jury trial right appeal denial due process law satisfied however congress impose procedures arbitration act fully satisfied reasonable fair reading act language history shows congress framers act great pains emphasize nonlawyers designated adjust arbitrate factual controversies arising valid contracts trespass upon courts prerogative decide legal question whether legal contract exists upon base arbitration today affirms holding three reasons none supported language history arbitration act first holds consulting agreement intended supplement separate contract interstate transfer assets contract evidencing transaction involving commerce language used congress describe contracts act designed cover light legislative history indicates act limited application contracts merchants interstate shipment goods light express failure congress use language making act applicable contracts affect commerce statutory language congress normally uses wishes exercise full powers commerce certain act intended apply consulting agreement second holds language act provides explicit answer question whether arbitration clause separable rest contract contained section merely provides must order arbitration satisfied making agreement arbitration issue language considered alone far providing explicit answer merely poses question kind allegations put making arbitration agreement issue since lower courts assumed federal act new york law might apply new york law general allegation fraud inducement puts issue making agreement arbitrate considered inseparable new york law rest contract necessarily holds federal law determines whether certain allegations put making arbitration agreement issue approves second circuit fashioning federal separability rule overrides state law contrary thus holds arbitration act designed provide merely procedural remedy interfere state substantive law authorizes federal courts fashion federal rule make arbitration clauses separable valid approves rule contrary state law contrary intention parties accepted principles contract law rule indeed elevates arbitration provisions contractual provisions recognizes result clearly intended congress finally summarily disposes problem raised erie tompkins recognized serious constitutional problem bernhardt polygraphic insufficiently supported assertions clear beyond dispute congress based arbitration act power regulate commerce congress relied power create federal law diversity cases reliance supplementary ii finally clear bill sponsors understanding function arbitration never intended issue fraud inducement resolved arbitration recognized two special values arbitration expertise arbitrator decide factual questions regard performance contractual obligations speed arbitration contrasted litigation resolve disputes performance contracts thus mitigate damages allow parties continue performance contracts arbitration serves neither functions contract sought rescinded ground fraud one hand courts far expertise resolving legal issues go validity contract arbitrators hand party seeks rescind contract allegation fraud inducement true arbitrator speedy remedy wrong never result resumption performance contract contract procured fraud summary trial procedures provided act may determine little delay arbitration must proceed advantage submitting issue fraud arbitration arbitrators compensation corresponds volume arbitration perform determine contract void fraud nothing arbitrate think raises serious questions due process submit arbitrator issue determine compensation tumey ohio iii difficulty choosing two alternatives neither quite contrary position clear beyond dispute upon reference act legislative history first clear congress intended act applicable diversity cases involving interstate commerce maritime contracts hold act inapplicable diversity cases severely limit impact second alternative clear congress passing act relied primarily power create general federal rules govern federal courts drafters act assured congress statute establishes procedure federal courts rests upon constitutional provision congress authorized establish control inferior federal courts far congressional acts relate procedure federal courts clearly within congressional power primary purpose statute make enforcible federal courts agreements arbitration purpose congress rests solely upon power prescribe jurisdiction duties federal courts one read legislative history without concluding power congress power legislate area commerce principal basis act also opposed view congress intended create substantive law govern commerce maritime transactions frequent statements legislative history act intended source substantive law congressman graham explained act house involve new principle law except provide simple method order give enforcement creates new legislation grants new rights except remedy enforce agreement commercial contracts admiralty contracts cong rec emphasis added suffice say judge medina chose alternative construing act create federal substantive law order avoid emasculation erie bernhardt judge medina content stop holding act makes arbitration agreements contract involving commerce enforceable federal even though basis jurisdiction diversity state law enforce agreements problem robert lawrence whether arbitration agreement enforceable new york arbitration act upon federal act based enforces arbitration clause terms federal act problem robert lawrence rather whether arbitration clause contract induced fraud separable new york law general allegations fraud inducement matter state law put issue making arbitration clause avoid application state law judge medina went holding federal act makes agreements arbitrate enforceable held act creates body law encompasses questions interpretation construction well questions validity revocability enforceability arbitration agreements affecting interstate commerce maritime affairs thus years passage arbitration act second circuit completely rewrote new formulation makes arbitration agreements enforceable save upon grounds exist federal law revocation contract enforcing arbitration agreement district must satisfied making agreement arbitration matter federal law issue judge medina turned task formulation principles federal substantive law necessary purpose formulated separability rule today adopts provided rule explicit answer looked intention parties notion separability rule liberal policy promoting arbitration today without expressly saying precisely judge medina robert lawrence content hold act intended make arbitration agreements enforceable federal courts valid legally existent state law holds act gives federal courts right fashion federal law inconsistent state law determine whether arbitration agreement made means even congress intended create substantive rights passage act wholly convinced intend create sweeping body federal substantive law completely take away power interpret contracts made citizens territory first legislative history clear congress intended thing congress assumed arbitration agreements recognized valid state federal law courts give damages breach simply refuse specifically enforce congress thus one limited purpose mind provide party agreement remedy formerly denied arbitration federal statute simply new procedural remedy act creates new legislation grants new rights except remedy enforce drafters act explicit federal statute providing enforcement arbitration agreements relate solely procedure federal courts infringement upon right state decide contracts shall shall exist laws sure whether contract exists question substantive law jurisdiction wherein contract made committee commerce trade commercial law arbitration law application emphasis added neither true statute declaring arbitration agreements valid source existence matter substantive law far present law declares simply policy recognizing enforcing arbitration agreements federal courts encroach upon province individual cohen dayton new federal arbitration law rev second avowed purpose act place arbitration agreements upon footing contracts separability rule applies arbitration clause result equality clauses contract always thought person attacks contract ground fraud seeks rescind seek rescission whole tidbits given option denying existence clauses affirming existence others agreed perform consulting services prima compete prima hold two agreements separable even though prima agreeing pay compete directly rely representations solvent simple fact prima agreed covenant compete arbitration clause fraudulent promise financially able perform consulting services held bethlehem steel whether number promises constitute one contract one determined inquiring whether parties assented promises single whole bargain whatever promise set promises struck third clear identical contract dispute litigated new york courts arbitration act prima required present claims fraud arbitrator state rule nonseparability applies hold today judge medina body federal substantive law created federal judges arbitration act required applied state courts holding effect seems leave air flout intention framers act yet opinion today act supplies remedy enforcement body federal doctrines determine validity arbitration agreement failure make act applicable state courts give rise forum shopping unconstitutional discrimination erie bernhardt designed eliminate problems greatly reduced act limited proper scope mere enforcement federal courts valid arbitration agreements iv reverse case civ prac provides party served notice intention arbitrate unless party served applies stay arbitration within ten days service shall thereafter precluded objecting valid agreement made principal support act came trade associations dealing groceries perishables commercial mercantile groups major trading centers practically testified support bill senate subcommittee explained bill designed cover contracts people different produced shipped bought sold commodities hearing subcommittee senate committee judiciary views expressed hearings senator sterling suggested mind proposed legislation relates contracts arising interstate commerce bernheimer chief exponent bill replied yes entirely farmer sell carload potatoes wyoming dealer state new jersey instance joint hearings subcommittees committees judiciary see also acts congress uses broad language defines commerce include even affects commerce federal employers liability act stat amended national labor relations act stat amended instances congress chosen restrictive language fair labor standards act stat amended prior case always made careful inquiry assure applying statute coverage congress intended meaning statute commerce neither expanded contracted arbitration act example carefully limited language covers contracts involving commerce nowhere suggestion meant extend contracts affecting commerce act uses narrow language also completely without declaration national interest served nationwide comprehensive scheme regulation created absence suggests congress intend exert full power commerce although requested arbitration pursuant new york law supra entirely clear new york law apply absence federal act points entirely clear whether new york courts consider prima promise arbitrate inseparable rest contract since robert lawrence held lower courts assumed application new york law produce different result since deems status state law immaterial case assumed throughout opinion absence arbitration act prima able obtain judicial resolution fraud allegations new york law section unlike expressly applicable situations like present one defendant case already pending federal moves stay lawsuit finding explicit answer provision expressly applicable almost completely ignores language proviso section bernhardt held define field congress legislating senate hearing supra ibid ibid senate hearing supra one constitutional provision got right trial jury waive advance ah question whether waive depends whether signature paper whether authorized signature whether paper valid paper whether delivered properly question waived right trial jury joint hearings supra seems quite clear cohen referring jury trial allegations challenging validity entire contract senate hearing supra see also joint hearings supra senate hearing supra questions arising contracts arbitrated remedy peculiarly suited disposition ordinary disputes merchants questions fact quantity quality time delivery compliance terms payment excuses like place also determination simpler questions law questions law arise daily relations merchants passage title existence warranties questions law complementary questions fact mentioned cohen dayton new federal arbitration law rev see senate hearing supra arbitration proper remedy questions arbitrators particular experience better left determination skilled judges background legal experience established systems law cohen dayton supra justice frankfurter chose alternative concurring opinion bernhardt even suggested decision shanferoke coal supply westchester service applied act interstate contract diversity case might decided differently bernhardt holding arbitration analysis alternatives see generally symposium arbitration courts nw rev note yale house report accompanying act expressly stated purpose bill make valid enforcible agreements arbitration contained contracts involving interstate commerce may subject litigation federal courts emphasis added cohen colleague commenting act passage explained federal courts given jurisdiction enforce agreements whenever judicial code jurisdiction basis jurisdiction diversity citizenship dispute must involve suits law cohen dayton supra see committee commerce trade commercial law arbitration law application note rev bill originally drafted american bar association introduced house sess cong rec expressly provided hat basis jurisdiction diversity citizenship district shall jurisdiction hereunder notwithstanding amount controversy unascertained though provision deleted senate omission intended substantially alter law cong rec committee commerce trade commercial law supra joint hearings supra although cohen brief filed congress suggested congress might rely power commerce added questions apparently raised connection expressly denied proposed law depends validity upon exercise admiralty powers congress testified made point clearer done new york made part judicial machinery done done constitutional form government cover great fields commerce gentlemen exercise power confer jurisdiction federal courts theory right tell federal courts proceed cohen dayton supra see cohen dayton supra committee commerce trade commercial law supra rose representing arbitration society america suggested act might beneficial effect encouraging enact similar laws joint hearings supra cohen assured congress said congress directing courts infringe upon provinces prerogatives question enforcement relates law remedies substantive law rule must changed jurisdiction agreement sought enforced disposition therefore means federal bludgeon force individual state unwilling submission arbitration enforcement seems implicit provision stay suit pending provision enforcement may ordered district save agreement jurisdiction title civil action admiralty subject matter suit arising controversy parties noted new york courts apparently find inconsistency application nonseparability rule state policy enforcing arbitration agreements policy embodied statute federal act copied joint hearings supra cohen dayton supra cong rec sess declaration national law equally applicable state federal courts see supra