I don't know what the arbitration clause says, but I would doubt that it would be applicable to a wrongful death lawsuit.
Good luck to you.
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There are several different questions here beyond the one you mention. The arbitration clause might not be legally permissible in nursing home contracts, or in this type of contract, or in this particular situation. As noted above, the contract as written, even if validly written and validly signed, might not cover negligence or wrongful death claims. You said you consulted an attorney; if they are the type of attorney that handles personal injury or medical malpractice, I can't understand why you are writing here. If that attorney didn't want your case, find one who does, and that attorney can look at the contract and give you a definitive answer.
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While I am not familiar with NJ law, I agree that an arbitration clause normally would not preclude you filing a wrongful death action. Your attorney should be able to answer that question for you as the answer will depend on what the clause says and what NJ law provides. Good luck.
I would need to see the arbitration clause, and discuss the facts and circumstances with you at some length. Depending on the circumstances, an arbitration clause may not be enforceable to prevent a wrongful death action. Even if the arbitration clause is enforceable, all is not lost---arbitration can be a good forum for pursing your case--especially if you have a strong case.
You say that you "consulted an attorney". Did you discuss this issue during this consultation? The attorney who you retain to represent you in this matter should advise you on this and many other issues--including most importantly whether you have a viable claim. Proving that a nursing home or its employees engaged in negligent patient care is often quite difficult, although not impossible. Note that there may be various statutory time constraints for bringing such a case. And you may be required to notify various insurance carriers and others who may have an stake in the case on a timely basis. It is good that you consulted with a lawyer--if that lawyer turned down the case and/or gave you a negative opinion about its value, then get another opinion. You need to move fast, however, as time is of the essence in investigating and pursuing such cases.