Eric Ferret and Stephen Courtney founded Sci.X Science Studio, LLC, a Delaware LLC. Sci.X’s operating agreement required that all disagreements be decided by arbitration rather than litigation. But neither member ever signed the agreement. Five years later, after a series of conflicts, Ferret sued Courtney. In response, Courtney filed a motion to dismiss, arguing that the operating agreement required Ferret’s claim to be arbitrated.

Questions:

1. Is the unsigned Sci.X operating agreement enforceable? Does Ferret have to arbitrate his claim?

2. Did the operating agreement need to be signed to be enforceable?

3. Ferret had sued in court. Under the operating agreement, was he permitted to do this?

4. Does that mean the case is going to arbitration?

5. What issue in particular did the court refer to under the Statute of Frauds?

6. So the court decided the case on the basis of the Statute of Frauds?