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LS311 Unit 6: Contracts: Completed - CASE ANANLYSIS - Essay Example

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09–497 (6/21/2010), United States Supreme Court settled that, when an agreement defined in Federal Arbitration Act (FAA) includes an agreement, in which the arbitrator determines the jurisdiction of the accord, then such agreement becomes…
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LS311 Unit 6: Contracts: Completed - CASE ANANLYSIS
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LS311 Unit 6: Contracts The legal case that DeFontes v. Dell raises falls under contract formation, as well the defense and jurisdiction to decide whether the arbitration contains an enforceable clause.
Jurisdiction of the Arbitration section
In Rent-a-center verses Jackson No. 09–497 (6/21/2010), United States Supreme Court settled that, when an agreement defined in Federal Arbitration Act (FAA) includes an agreement, in which the arbitrator determines the jurisdiction of the accord, then such agreement becomes enforceable if the party to the case disagrees with the jurisdiction of that agreement (Born, 2006).
On the other hand, when the party to the contract disagrees with the jurisdiction of the agreement in totality, then the cases is ruled in favor of the Arbitrator. In the case scenario, the decision of the court depends upon the Arbitration Clause preserved by Dell, as it may be lawfully difficult to consider the validity of the agreement as a whole, thus making the Arbitration clause unquestionable. The validity of the clauses becomes valid if only the clause is independent and enforceable (Born, 2006).
Given that, the facts are not supportive, then the assumption is left on the hands of the court to decide on the validity of the whole contract, inclusive of the Arbitration clause.
Contract Formation
Pursuant to the Uniform Commercial Code, which oversees the sale of goods, a valid contract, must indicate the agreement of the participating parties. In the scenario, Dell’s terms and conditions are printed on their website during the time of the transaction, and DeFontes went ahead and conducted the transaction. For this reason, there is an assumption that DeFontes was fully aware of the clause and made the purchase (Born, 2006).
Misrepresentation Defense
In order for misrepresentation to become enforceable, it must indicate a statement of material fact; or rather, it must have an active concealment, aimed at justifying the case and result to damages. In this case, Dell Arbitration case falls under a statement of material fact. However, the statement was in Dell’s website where the purchaser could not easily notice, and this amounts to an Active concealment.
DeFontes may present an argument that the ‘active concealment’ is material enough to justify the case of withdrawing from the contract and receive compensation amounting to damages suffered, as well return the computers. On the other hand, Del may consider the contract binding since the Arbitration clause does not indicate any misrepresentation or active concealment. In this aspect, the ruling might favor DeFontes since Dell had undue influence over DeFontes by refusing to disclose about the arbitration clause (Lew, Loukas & Stefan, 2003).
Adhesion Defense
According to Adhesion Defense, if one party makes unjustly favorable terms to the other party, then such terms are enforceable to the other party without any negotiations ("take it or leave it"). In this case, Dell’s argument for arbitration is not essentially unreasonably favorable to Dell. The law recommends the use of arbitration in settling disputes. There must be something concrete to show that the contract favors Dell. For this reason, the Arbitration clause does not fall under adhesive defense, and DeFontes cannot enforce it (Lew, Loukas & Stefan, 2003).
Unconscionableness requires the existence of both unreasonable favorable terms and bargaining power by either of the party to the contract. As discussed, the arbitration clause does not fall under the unreasonable favorable terms, but Dell has a control over the contract since the contract falls under the “take it or leave it”. It, therefore, proves difficult to consider legal Unconscionableness, and Del wins the case (Lew, Loukas & Stefan, 2003).
Born, G. (2006). International Arbitration and Forum Selection Agreements: Planning Drafting and Enforcing, 2nd Ed. The Hague: Kluwer Law International.
Lew, D. M., Loukas A., & Stefan K. (2003). Comparative International Commercial
Arbitration. The Hague: Kluwer Law International. Read More
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