Ace Hardware Corporation v. Advanced Caregivers, LLC, this is a fun little case. Caregivers is a franchisee of Ace Hardware Corporation. Caregivers attempts to wage a class action against Ace Hardware Corporation. Ace Hardware Corporate says: ‘Nice try. There is an arbitration clause in your franchise documents. You cannot sue us in court; we have to go to arbitration.

Caregivers scratches its head. It turns out that Caregivers first signed franchise documents on January 8, 2009. A little over 5 months later, Ace Hardware notices an error regarding Caregivers’ address. Ace Hardware asks Caregivers to re-execute the franchise documents to correct the address of Caregivers. Caregivers and Ace Hardware re-execute the franchise documents in June of 2009. But, the documents are not the same. The January franchise documents did not contain an arbitration clause and the June franchise documents did contain an arbitration clause.

 Caregivers calls foul. The June franchise documents were intended to only correct the address. There was no mention of an arbitration clause. To defend its position, Caregivers pulls out all the stops. It claims mutual mistake, failure to give notice, unconscionability, and fraud.

The court doesn’t go for any of it. The court said:

  • Under the law, Respondents [Caregivers] are presumed to have read the contract before signing it. Therefore, Respondents’ claim of mutual mistake fails.
  • Given that the arbitration provisions in both June 2009 Agreements appear directly above the signature lines and, in one agreement, the word “arbitrate” appears at least a dozen times, Respondents could have easily discovered the purported fraud had they simply examined the contracts in the three weeks between receiving them and remitting them, signed. Therefore, Respondents’ claim of fraud also fails as a matter of law. 
  • Given the placement and language of the brief arbitration clauses in the second set of Agreements, Respondents can make no showing that the arbitration clauses were too difficult to find, read, or understand. Thus, Respondents’ claim of procedural unconscionability also fails.

 So, at the end day, use your eyes not your ears. Even if the other party assures you or promises you something, make sure to read the agreement. The language of the contract will rule and all spoken words may be discarded.

Lesson from the Court: Either fraud, unconscionability, nor mistake will save you. The law assumes that you have read the agreement.

Use Your Eyes, not Your Ears.

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