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January 15th, 2016

California High Court Leads Acceptance of Arbitration Clauses and More Reasonable Word Usage

In light of a subsequent state high court decision, California’s 4th Division Court of Appeal has reversed itself and upheld the enforceability of an arbitration provision within an automobile sales contract.

As recently reported by autonews.com, a class action brought by car buyer William Goodridge alleged that an arbitration clause included in the sales contracts of El Cajon elcajonmitsubishiMitsubishi were “unconscionable.”  Incredibly enough, the trial court agreed, deemed the clause unenforceable, and was initially upheld on appeal.

But then, in Sanchez v. Valencia Holding Co., LLC, the California Supreme Court on Jan. 12 reached a more reasonable conclusion — respecting the real meaning of words.  The high court found that a bad bargain was not necessarily an unconscionable bargain in finding a similar arbitration provision enforceable.

So the 4th Division reconsidered its car sales decision and unanimously ordered arbitration.  Let’s hope the high court’s guidance slows the hysterical inflation of word meanings and usage by so many lower California courts.  ISIS beheadings are unconscionable.  Used car sales contracts are not.

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