The arbitration agreement can be terminated like most contracts by agreement of the parties, in the event of the breach of a fundamental term or condition of the contract and by abandonment.
The agreement may be rendered ineffective if it is found to be inoperable or incapable of being performed. An agreement that is found to be null and void evidences a lack of the parties’ consent to arbitrate and so never came into existence.
An arbitration agreement is incapable of being performed when there is again a clear intention by the parties to arbitrate their dispute but a frustrating event (external to the agreement) that happens subsequent to its conclusion makes its performance impossible.
So, an arbitration agreement that is null and void culminates in the termination of the agreement while one that is either inoperative or incapable of being performed may still be rescued.
A party to the arbitration agreement can also repudiate its right to arbitration either actively or passively. To actively repudiate its right, the party may, where the other party has commenced litigation, join in the litigation without raising the existence of the arbitration agreement or the party may take steps in the proceedings so as to consent to the repudiation of the obligation to arbitrate the covered dispute.
One party to the arbitration agreement can abandon it (which is treated as an offer) and once this abandonment is accepted by the other party, it terminates the agreement to arbitrate (but not the substantive contract).
The arbitration agreement will also be terminated by vitiating factors such as fraud, mistake, misrepresentation, duress and undue influence, which affect the consent of one or more parties to the arbitration agreement.
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