Contract Law and Ethics Case Study

Contract Law and Ethics Case Study

ETH/321

Contract Law and Ethics Case Study

In a world where laws vary based on jurisdiction and types, one must ensure that any contractual agreement made is valid and without a hidden clause. With that said, it is essential to review the case involving Vassilkovska V. Woodfield Nissan, Inc. 830 N.E.2d 619 (III. App. 2005) and examine the facts, issues, rule, analysis, and conclusion to determine the type of contract, ethical considerations, and remedies for breach.

Facts

According to the Vassilkovska v. Woodfield Nissan, Inc., case 8.3 the facts are that Vassilkovska purchased a used vehicle from Woodfield Nissan, Inc. and both parties agreed to work out any issues outside of court through arbitration. Arbitration is an ADR method involving a neutral, private intervention of a third party, instead of going through a trial (Mandatory Arbitration: Application of the Federal Arbitration Act, 2017). However, within the Woodfield’s promise, there were several types of claims omitted from the arbitration agreement. Also, the contract excused Woodfield from arbitration and allowed them to seek assistance in a court of law. After purchasing the used vehicle, Vassilkovska took Woodfield to court for misrepresentation of the price within the financing agreement. Therefore, the court had to decide if the arbitration agreement was binding.

Issues

In the case, Vassilkovska versus Woodfield, there are several issues taken into consideration. The first issue identified is that the arbitration contract brought forward by Woodfield was illusory or unreal. According to SHAY (2015), while arbitration is quite popular between parties, it has become the subject of litigation in courts due to unenforceable and unconscionable contracts (p. 421). Therefore, the arrangement contained no promise to arbitrate on the part of Woodfield. The next issue outlined in the case is the fact Woodfield secured its right to seek litigation should the Vassilkovska fail to pay the debt as per contract. There were other clauses such as the seller would have the right to sue the buyer, but on the reverse, the buyer does not retain the right to appeal the seller. Therefore, it was evident that there was a lack of consideration on Woodfield’s part.

Rule

The ruling in the case of Vassilkovska vs. Woodfield Nissan, Inc. was decided and documented as the following: “For the foregoing reasons, the trial court’s denial of Woodfield’s motion to dismiss and compel arbitration is affirmed.” BURKE, P.J. affirmed the order, and WOLFSON, J. concur (CourtListener, 2005). This outcome means the motion filed by Woodfield Nissan, Inc. was dismissed and must be settled outside the court by an ADR which is also known as Alternative Dispute Resolution.

Analysis

In the case of Vassilkovska v. Woodfield Nissan, Inc., the opinion of the court delivered by Justice Garcia maintained to treat an agreement to arbitrate like any other contract. However, without a commitment to intervene; there can be no forced arbitration. The arbitration agreement was not beneficial to the plaintiff because there was nothing specific therein indicating that Woodfield was required to abide by the arbitration agreement as well. Woodfield could not point to its promise to arbitrate to enforce the plaintiff’s obligation to comply with the deal. In fact, Woodfield made the agreement null and void or unenforceable by excluding itself from the arbitration process by only requiring the plaintiff to abide by the agreement regarding claims against them. Woodfield’s business practice, in that respect, was unethical.

Conclusion

In conclusion to this case, the arbitration agreement should be inadmissible for lack of consideration and the conditions of arbitration were also very misleading, and, as such, should be null and void. The trial’s outcome upheld denying Woodfield’s motion to dismiss arbitration within reason.

The language and stipulations of the arbitration agreement were unethical, although a second arbitration agreement, in general, would not exist. Woodfield’s neglect to provide the details omitting Vassilkovska’s ability to sue was for beneficial purposes which is a deceitful act on his part. Woodfield’s argument of mutual obligation to arbitrate was taken into consideration by the court, and, therefore, could have been used as a deciding factor. However, the arbitration agreement was not mutual. Thus, both parties are not bound due to Woodfield’s deception. Violating the Consumer Fraud and Deceptive Business Practice Act was not ethical on Woodfield’s part. Therefore, Vassilkovska was within rights to sue for fraud due to Woodfield masking the price of the vehicle and purposely having Vassilkovska sign, blindly, agreeing to price changes. As such, the court should cancel the loan and award a full refund.

References

CourtListener. (2005, May 24). Court Listener. Retrieved from Free Law Project: https://www.courtlistener.com/opinion/2059016/vassilkovska-v-woodfield-nissan-inc/

Mandatory Arbitration: Application of the Federal Arbitration Act. (2017). Congressional Digest, 96(10), 3.

SHAY, D. (2015). Get The Best of Both Worlds: Illusory Arbitration Agreements. Journal Of Dispute Resolution, 2015(2), 421-435.