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An arbitration agreement will not be invalidated by the failure of the party seeking arbitration to sign the agreement, by the failure to date the agreement on its opening page, or by a mere unsupported allegation that the agreement is an unconscionable contract of adhesion, according to a federal district court in Ohio.
In 1st Choice Auto Brokers, Inc. v. Credit Acceptance Corp., No. 2:06-CV-816, 2007 WL 2079722 (S.D. Ohio July 17, 2007), 1st Choice and Credit Acceptance entered into an agreement to finance vehicles. The agreement provided for arbitration of disputes arising between the parties. 1st Choice sued Credit Acceptance for breach of contract, and Credit Acceptance moved to compel arbitration. 1st Choice opposed the motion, alleging that there was no binding agreement between the parties, and, alternatively, that the dispute was not within the scope of the agreement.
The Court first found that there was a valid agreement that would require arbitration of claims within the scope of the agreement. The Court rejected 1st Choice's argument that Credit Acceptance's failure to sign the agreement made it invalid, noting that the intentions of the parties controlled whether a valid agreement existed when all parties failed to sign the agreement. The Court found that 1st Choice clearly intended to be bound to the agreement by signing it, and the fact that the party seeking to compel arbitration did not sign it did not change the intention of 1st Choice to be bound to it.
The Court also dismissed the argument that the absence of a date on the first page of the agreement rendered it invalid, noting that this argument was unsupported by case law, and, nevertheless, the agreement was dated on another page. The Court also rejected 1st Choice's contention that the contract was invalid because it was a contract of adhesion, finding the contention unsupported by law in 1st Choice's pleadings.
Having found a valid agreement to arbitrate, the Court then held that 1st Choice's claims were squarely within the scope of the agreement. The Court observed that the very breach of the contract alleged, the failure of Credit Acceptance to remit advances to 1st Choice, was governed by an article of the agreement. Since "[a]ny disputes and difference arising between the parties in connection with or relating to" the agreement were indicated as within the scope of the arbitration agreement, this particular claim was clearly within its scope and, therefore, arbitrable.
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