Mandatory arbitration provisions have been much in the news lately. The New York Times recently ran a three-part series on arbitration provisions in consumer contracts titled “Beware the Fine Print.” The U.S. Supreme Court underscored its commitment to enforcing arbitration provisions in DirecTV v. Imburgia, No. 14-462 (Dec. 14, 2015), decided just last month. Delaware’s strong public policy in favor of arbitration was reaffirmed recently in a decision by state Superior Court Judge Vivian L. Medinilla in Airbase Carpet Mart v. AYA Associates, C.A. No. N15C-03-104-VLM (Del. Super. Dec. 12, 2015). She held that the failure to fully execute an agreement to arbitrate did not invalidate it, and that the arbitration provision, as well as a venue selection clause, applied to a statutory cause of action under the Delaware Consumer Fraud Act (CFA).
Airbase Carpet Mart Inc. sued AYA Associates Inc. for damages for breach of contract and false advertising related to a contract for the design and installation of a point-of-sale system and software. The contract consisted of a two-page “purchase order and software license agreement.” The president of Carpet Mart signed the “license accepted” line on the first page of the agreement, but did not sign the identical “license accepted” line on the second page of the agreement, which was subtitled “Software License Agreement.” The second page contained, among other items, a “jurisdiction provision” requiring binding arbitration for “any disputes under this agreement” and a venue selection clause. Carpet Mart alleged the product was inadequate and did not conform to the specifications in a pre-agreement demonstration, and that AYA fraudulently misrepresented its status as a certified “Gold Microsoft” partner in violation of the CFA.
