INEQUALITY IN BARGAINING POWER; NOT INVALIDATE ARB

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INEQUALITY IN BARGAINING POWER; NOT INVALIDATE ARB

Postby Administrator » Tue Sep 30, 2014 11:11 am

INEQUALITY IN BARGAINING POWER; NOT INVALIDATE ARB


Morgan's argument about Bill Kay's superior bargaining power is also unconvincing. It appears that Morgan had no choice but to sign the arbitration agreement if he wanted the car. However, this is also true of every document he signed. In general, arguments about the “take it or leave it” nature of a transaction and about unequal bargaining power go to the validity of the entire contract and are more appropriately resolved by an arbitrator. Dorsey, 46 F.Supp.2d at 806. When ruling on a motion to compel arbitration, “a federal court may consider only issues relating to the making and performance of the agreement to arbitrate.” Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967); see also Sweet Dreams Unlimited, 1 F.3d at 641 (“[A] dispute, which has as its object the nullification of a contract, ‘arise[s] out of’ that same contract” and, thus, is arbitrable); Dorsey, 46 F.Supp.2d at 806 (holding that “general” unconscionability contentions are insufficient to defeat a motion to compel). In this case, Morgan's “bargaining power” argument appears to be directed at the entire bargaining process, not just his signing of the arbitration agreement. (First Am. Compl. ¶ 48 (“Defendant presented Plaintiff with a stack containing numerous documents and required that Plaintiff affix his signature on said documents, without explaining to Plaintiff what he was signing.”).) This argument is best reserved for the arbitrator.


*5 Even were the court to reach the merits of Morgan's bargaining power argument, it would find it unconvincing. Although it is clear that Bill Kay enjoyed the superior bargaining position, “mere disparity of bargaining power is not sufficient grounds to vitiate contractual obligations.” Streams Sports Club, 75 Ill.Dec. 667, 457 N.E.2d at 1232; cf. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) (“Mere inequality in bargaining power ... is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context.”). Moreover, in this case, Morgan's bargaining position was not so inferior that he should be characterized as helpless. Morgan has not alleged that he was in such a vulnerable spot that he had no choice but to buy a 1997 Sebring from Bill Kay. He fails to convince the court that the disparity in bargaining power renders the arbitration agreement unconscionable. See Tezky v. Woodfield Chevrolet, No. 00 C 5718, 2001 WL 946188, *2 (N.D.Ill. Mar.13, 2001) (rejecting plaintiffs' “bargaining power” argument because “[p]laintiffs could have easily looked to other dealers or private sellers in their pursuit of a used Ford Mustang”).

N.D.Ill.,2002.
Morgan v. Bill Kay Chrysler Plymouth
Not Reported in F.Supp.2d, 2002 WL 31133102 (N.D.Ill.)
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