Parties use arbitration provisions for a variety of reasons, including enhanced efficiency and advantages of resolving disputes in private and outside of court.
In crafting arbitration clauses, businesses often retain some asymmetry, giving one party rights the other party does not enjoy. Courts generally permit this, even in adhesion contracts, as long as the provision is clearly disclosed and presented fairly. But a recent Fifth Circuit decision illustrates that clear presentation is not enough: a provision can be legible, labeled, and free of fine print, and still fail.
In MAPP, L.L.C. v. Floor and Decor Outlets of America, Inc., No. 25-30536 (5th Cir. Aug. 6, 2026), the court struck down an arbitration provision that gave only one party the “sole discretion” to decide whether disputes would be arbitrated on the grounds that it was adhesionary and unenforceable under Louisiana law. Notably, the court found that the factors governing how the provision was presented favored enforcement, and nevertheless determined the provision invalid based on its one-sided practical effect.
A One-Sided Right to Elect Arbitration
Floor and Decor Outlets of America, Inc. (“F&D”), a national flooring retailer, retained MAPP, L.L.C., a Louisiana construction management company, to construct a retail store in Metairie, Louisiana. After F&D terminated the agreement over alleged project delays, MAPP filed suit seeking to recover more than $3 million for work performed.
F&D moved to compel arbitration citing a dispute-resolution provision in the parties’ agreement. The provision stated that unresolved claims “may, in the sole discretion of Owner, be decided by arbitration.” As F&D was designated as the “Owner,” F&D alone could decide which disputes would proceed to arbitration. MAPP had no corresponding right to require arbitration.
The U.S. District Court for the Eastern District of Louisiana denied F&D’s motion on procedural grounds, concluding that F&D had not completed contractual dispute-resolution steps that preceded arbitration. The Fifth Circuit affirmed the denial of F&D’s motion but for a fundamentally different reason. Rather than deciding the procedural issue, it held that the arbitration provision itself was invalid under Louisiana’s law governing contracts of adhesion.
Conspicuous, but Still Unenforceable
Applying Aguillard v. Auction Management Corp. and Duhon v. ActiveLaf, LLC, the Fifth Circuit considered four factors: (1) the physical characteristics of the arbitration provision; (2) whether it was sufficiently distinguished from other contractual terms; (3) the mutuality of the provision; and (4) the parties’ relative bargaining strength.[1]
The first two factors favored enforcement. Although the provision appeared in a lengthy, single-spaced agreement, the court found that it was legible, demarcated, and contained within a broader dispute-resolution section. In other words, this was not a case in which an arbitration requirement was buried in fine print.
The remaining factors, however, favored MAPP.
First, the provision was substantially nonmutual. F&D could compel MAPP to arbitrate, but MAPP could not compel F&D to do the same. The agreement also provided for an award of attorneys’ fees incurred in enforcing the arbitration provision. Although the fee language referred facially to “each party,” the Fifth Circuit found it functionally one-sided because only F&D possessed the right to elect and enforce arbitration.
Second, the court found that MAPP occupied an inferior bargaining position. F&D had used a competitive bidding process and, after selecting MAPP, provided its standard-form agreement, which MAPP had no role in drafting. The court emphasized the disparity between a national retail chain and a local contractor seeking its business. Taken together, the court concluded that MAPP was aware of the unequal terms but had “little choice but to accept” them.
This is the decision’s core lesson: clear presentation is not enough. Sound drafting addressed the first two factors successfully. The clause was legible, set apart, and placed within a defined dispute-resolution section. However, the clear presentation failed to save the provision because the last two factors concern the practical effect of the terms rather than the adequacy of notice. A clause can be conspicuous and still fail if the result is too heavily one-sided.
Not a Categorical Rule Against Asymmetric Arbitration Clauses
MAPP does not hold that every one-sided arbitration clause is unenforceable. The Fifth Circuit expressly recognized that Louisiana law does not require “term-for-term mutuality;” the Louisiana Supreme Court has cautioned against applying a rule that would impermissibly single out arbitration agreements under the Federal Arbitration Act. Instead, courts must consider the contract and surrounding circumstances as a whole.
The court did, however, reject F&D’s argument that business-to-business agreements should be treated as a categorically different class. Commercial status matters, the panel explained, only insofar as it affects the four-factor analysis; and here it did not rescue the provision, notwithstanding that MAPP was itself a commercial construction manager.
That limitation is particularly important outside Louisiana, where the enforceability of unilateral arbitration provisions varies considerably. New York, for instance, enforces arbitration agreements exercisable at one party’s election. In Sablosky v. Edward S. Gordon Co., 73 N.Y.2d 133 (1989), the New York Court of Appeals upheld a one-sided arbitration clause, reasoning that consideration supporting the contract as a whole was sufficient.[2] Florida, Texas, and Georgia are likewise comparatively permissive.[3]
California, New Jersey, Maryland, and New Mexico, by contrast, scrutinize one-sided arbitration terms more closely.[4]
MAPP is a Louisiana decision applying Louisiana contract law; it does not establish a nationwide rule prohibiting one party from retaining greater forum-selection rights.
The Delegation Question
In MAPP, the provision incorporated the AAA Construction Industry Arbitration Rules. Under Petrofac, Inc. v. DynMcDermott Petroleum Operations Co., 687 F.3d 671 (5th Cir. 2012), incorporation of AAA rules can supply clear and unmistakable evidence that the parties delegated questions of arbitrability to the arbitrator, meaning the arbitrator, not a court, decides whether a dispute must be arbitrated. F&D expressly raised delegation on appeal, arguing that the AAA rules delegated questions concerning the arbitration provision’s “validity or scope” to the arbitrator. MAPP disputed that incorporation of the AAA rules accomplished an enforceable delegation.
Neither the majority nor the concurrence addressed the issue. MAPP therefore leaves unresolved how the incorporated AAA rules interacted with the court’s decision to adjudicate the validity of the arbitration provision itself. But the issue offers a reminder for drafters: incorporating institutional rules may accomplish delegation, but an express delegation provision makes the parties’ intent considerably harder to dispute.
Practical Takeaways
MAPP provides a useful warning for businesses using one-sided dispute-resolution provisions, including in business-to-business contracts: a provision may be conspicuous and clearly written and still fail if its practical effect too heavily favors the drafting party.
Businesses should audit arbitration provisions not only for adequate disclosure, but also how their component parts operate together. Who may elect arbitration, who may remain in court, and who bears the costs of enforcing the provision are critical questions. Facially neutral language deserves particular attention: a fee provision referring to “each party” may be treated as one-sided if only one party can realistically invoke it.
The safest structure remains a mutually mandatory or mutually electable arbitration provision. Where a business has a legitimate reason for retaining a unilateral election right, MAPP suggests keeping the rest of the agreement symmetrical. Additional one-sided features, particularly fee-shifting provisions or other terms that magnify the practical imbalance, may increase the risk of an enforceability challenge.
For companies using standardized agreements across multiple jurisdictions, the decision also offers a broader reminder: dispute-resolution provisions should not be treated as boilerplate. State contract law can materially affect whether the same arbitration architecture will be enforced from one jurisdiction to another. Provisions warrant jurisdiction-specific review, not uniform deployment.
Endnotes
[1] Aguillard v. Auction Mgmt. Corp., 2004-2804 (La. 6/29/05), 908 So. 2d 1; Duhon v. ActiveLaf, LLC, 2016-0818 (La. 10/19/16), 411 So. 3d 605.
[2] See also Pictet Funds (Eur.) S.A. v. Emerging Managers Grp., L.P., No. 14-CV-6854 (SAS), 2014 WL 6766011, at *6 & n.65 (S.D.N.Y. Dec. 1, 2014) (recognizing Sablosky).
[3] See, e.g., Avid Eng’g, Inc. v. Orlando Marketplace Ltd., 809 So. 2d 1 (Fla. Dist. Ct. App. 2001); In re AdvancePCS Health L.P., 172 S.W.3d 603 (Tex. 2005); In re Palm Harbor Homes, Inc., 195 S.W.3d 672 (Tex. 2006); Crawford v. Great Am. Cash Advance, Inc., 284 Ga. App. 690, 644 S.E.2d 522 (2007).
[4] See, e.g., Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 6 P.3d 669 (2000); Delta Funding Corp. v. Harris, 189 N.J. 28, 912 A.2d 104 (2006); Coady v. Nationwide Motor Sales Corp., 32 F.4th 288 (4th Cir. 2022); Cordova v. World Fin. Corp. of NM, 2009-NMSC-021, 146 N.M. 256, 208 P.3d 901.
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The Commercial Litigation Update blog is currently edited by Jennifer O'Connor and Adam Paine.
