A Missouri appellate court held that e-mails between the parties' attorneys about terms of arbitration do not result in an agreement to arbitrate.

In Arrowhead Contracting, Inc. v. M.H. Washington, LLC, No. WD68243, 2008 WL 169714 (Mo. App. W.D. Jan. 22, 2008), Arrowhead did construction work for Weitz Company. After a dispute arose regarding the work, Arrowhead filed suit for nonpayment. Weitz had the option of submitting the suit to arbitration pursuant to a subcontract between the parties.

Subsequently, Arrowhead's attorney discussed the possibility of arbitration with Weitz's attorney. In a follow-up letter, Arrowhead outlined the agreed upon terms of arbitration, but noted that certain terms had not yet been agreed. The letter called for additional negotiation of those terms when necessary information had been reviewed.

Weitz declined to arbitrate the dispute and Arrowhead moved to compel arbitration. The circuit court denied the motion and Arrowhead appealed.

The Court agreed with Weitz that no agreement to arbitrate had been concluded between the parties, finding it dispositive that the parties had agreed to reserve the term of the scope of arbitrator power for future determination.

The e-mail was only an acknowledgment that the type of arbitration had been agreed. It did not show that the "parties had mutually agreed upon all terms of the arbitration." Such "negotiations and preliminary steps do not constitute a contract." See Abrams v. Four Season Lakesites/Chase Resorts, Inc., 925 S.W.2d 932, 937 (Mo. Ct. App. 1996).

Further, the Court rejected Arrowhead's argument that the agreement was valid even without a determination of the extent of arbitrator power. The parties clearly did not want to leave this term open to be determined by Missouri law, or by implication in the letter.