The buyer subsequently sued the seller for intentional infliction of emotional distress, defamation, and violation of S.C. Code Ann. §16-17-430 (unlawful communication). The seller moved to compel arbitration as was stated in the contract. Both the trial court and the South Carolina Court of Appeals ruled that the motion to compel arbitration be denied. The South Carolina Supreme Court affirmed the lower courts’ decision based on the buyer’s inability to foresee the seller’s actions associated with the tort of outrage. This reasoning along with the similar very recent South Carolina Supreme Court ruling in Aiken v. World Fin. Corp. of S.C., 644 S.E.2d 705 (S.C. 2007),led the court rule in favor of the buyer by rejecting the motion to compel arbitration.  The court wrote that when "...uncivilized acts ... arise in the course of performance of contracts containing arbitration clauses, South Carolina courts will not interpret arbitration clauses to apply to such acts which are outrageous and unforeseen."

    The court quoted the following language from its opinion in the Aiken case which summarizes the rule applied in this case:  "Because even the most broadly-worded arbitration agreements still have limits founded in general principles of contract law, this Court will refuse to interpret any arbitration agreement as applying to outrageous torts that are unforeseeable to a reasonable consumer in the context of normal business dealings.

    Many declarations forming community associations contain arbitration clauses.  It is important to understand that an arbitration clause may not cover every dispute that might arise.

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