Baby Dolls Topless Saloons, Inc., Burch Management Company, Inc., Bds Restaurant, Inc., and Ttna, Inc. v. Gilbert Sotero, as the Representative of the Estate of Stephanie Sotero Hernandez, Eduviges Chapa III as Next Friend of A.C.C., a Minor, and Ivan Hernandez, Individually and as Representative of the Estate of Stephanie Sotero Hernandez, 642 S.W.3d 583

Background

Stephanie Sotero Hernandez (an exotic dancer) signed a 12‑page contract with Baby Dolls Topless Saloons granting a "revocable license" and a non‑exclusive right to occupy designated premises to perform erotic dance; the contract included a broad arbitration clause invoking the FAA.
Hernandez and the Club operated under that contract for nearly two years before Hernandez died in a car crash; her family sued the Club for wrongful death alleging over‑serving alcohol.
The Club moved to compel arbitration; the trial court denied the motion and a divided court of appeals affirmed, holding the contract lacked definiteness because of inconsistent uses of the terms "relationship," "license," and "this Agreement."
The court of appeals relied in part on a duration/renewal clause that treats "this Agreement" and "the License" separately in some places and together in others, concluding there was no meeting of the minds.
The Texas Supreme Court reversed, holding the contract is reasonably susceptible to a reading that ties the license to the agreement (including an automatic renewal), that the parties formed an agreement they acted upon, and that the arbitration provision—whose delegation language the Family conceded—requires compelling arbitration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Formation / definiteness (meeting of minds)	Terms like "relationship," "license," and "this Agreement" are used inconsistently so the contract is indefinite and never formed	Contract must be construed as a whole; parties performed under it for years; reasonable reading ties license to agreement making terms definite	Reversed COA: agreement was formed and sufficiently definite when read as a whole
Delegation of threshold arbitrability	(Family conceded) the arbitration clause delegates arbitrability questions to the arbitrator	Clause’s bolded language clearly and unmistakably delegates validity, scope, and breadth to the arbitrator	Held: delegation controls; arbitrator decides gateway questions the parties agreed to arbitrate
Expiration / renewal (was contract effective at time of accident?)	Even if a contract existed, it expired Dec. 31, 2017 and thus no contract covered the accident	Renewal language reasonably ties the license and the agreement; expiration/renewal is a question for the arbitrator under separability	Held: expiration/renewal dispute is for the arbitrator, not the court
Challenge to whole contract vs arbitration clause (who decides validity)	Family challenges the contract’s enforceability as a whole based on indefiniteness	Under FAA separability, challenges to the contract’s validity (not specifically to the clause) go to the arbitrator unless delegation is absent	Held: separability + delegation mean the arbitrator decides many validity/scope questions; court must compel arbitration

Key Cases Cited

Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (separability doctrine: clause may be enforced even if party attacks the contract generally)
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (court reviews de novo whether an agreement to arbitrate exists)
RSL Funding, LLC v. Newsome, 569 S.W.3d 116 (Tex. 2018) (distinguishes challenges to contract formation, clause validity, and arbitrability)
In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571 (Tex. 1999) (party seeking arbitration must show a valid agreement and that the dispute falls within its scope)
Fischer v. CTMI, L.L.C., 479 S.W.3d 231 (Tex. 2016) (contract construction principles: construe whole instrument, avoid forfeitures, imply reasonable terms)
Forest Oil Corp. v. McAllen, 268 S.W.3d 51 (Tex. 2008) (courts must compel arbitration when parties agreed to arbitrate gateway issues)
In re Morgan Stanley & Co., 293 S.W.3d 182 (Tex. 2009) (analysis of which arbitrability questions are for court versus arbitrator)
Robinson v. Home Owners Mgmt. Enters., 590 S.W.3d 518 (Tex. 2019) (court decides validity of arbitration provision unless delegation is clearly and unmistakably made to arbitrator)