§ 173.003.Agreement or Bylaw Provision Valid

The operative section, and its third subsection is the one with teeth.

A written agreement is valid and enforceable. The agreement must be to arbitrate at common law a controversy that arises between the parties after the date of the agreement.

Only future controversies are addressed. Chapter 171 covers both existing and future disputes; this section speaks to the executory promise the common law would not enforce.

Revocation is limited to contract grounds existing at law or in equity, the same limit Section 171.001(b) imposes.

The third subsection turns a bylaw into an agreement. A provision in the bylaws of a qualifying nonprofit corporation requiring a member to arbitrate a controversy at common law is a valid, enforceable, and irrevocable agreement by that member.

Three adjectives, and the last is unusual. Irrevocable is a stronger word than the statute uses anywhere else in this family of chapters.

The mechanism is what makes the chapter work. Members of an association do not sign arbitration agreements with each other; they accept bylaws when they join.

The bylaw must cover the right controversies — one that subsequently arises between members, or between the corporation and its members.

The corporation must be one of the covered kinds, incorporated under the Texas Non-Profit Corporation Act or the nonprofit subchapter of the Business Organizations Code.

Section 173.002(b) is the limit on all of it. A property owners’ association cannot use a bylaw this way, because the chapter does not reach those disputes.