In previous blogs we've reported on what makes a boilerplate agreement unenforceable. Recently another appellate court weighed in in another automobile purchase case. Two buyers of a new car were presented with a long, two sided contract containing an arbitration clause on the back of one the pages at the very bottom of the page.
The arbitration clause itself was harsh and one sided favoring the dealer of course. The buyers were not given the opportunity to review the contract and did not even know it was two sided. The trial court did not find the contract was unconscionable. The appellate court reversed finding both procedural and substantive unconscionability.
The procedural unconscionability stemmed from the placing of the arbitration clause on the back of the two sided page at the bottom. The substantive unconscionability stemmed from several clauses in the arbitration paragraph, one permitting an appeal in an award of injunctive relief, one permitting an appeal to an arbitration panel of three arbitrators if the award exceeds $100,000, another requiring the appealing party to pay the filing fee in advance and lastly a clause exempting repossession from arbitration though permitting injunctive relief. Vargas v. SAI Monrovia 2013 DJDAR 7148.
