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An indication on the front of a contract that "conditions limit[ing] the sender's legal rights" were contained on the back of the agreement satisfied notice requirements for enforcing an arbitration agreement, according to the Alabama Supreme Court.
In Tyler v. Williams, 1051435, 2007 WL 431425 (Ala. Feb. 9, 2007), Williams attempted to make a mortgage payment to Wal-Mart, which was acting as an agent for MoneyGram Payment Systems, Inc. When Wal-Mart allegedly failed to transfer the funds, Williams lost her home through foreclosure proceedings. Williams sued, and Wal-Mart moved to compel arbitration.
The Court rejected Williams' challenges to the validity of the arbitration clause, which was contained on the back of the payment contract. An earlier Alabama case invalidated a contract that contained an arbitration agreement on the reverse side, but in that case, the front of the contract made no allusion to additional terms on the back. Thermo-Sav, Inc. v. Bozeman, 782 So.2d 241, 243 (Ala. 2000). By contrast, the Wal-Mart agreement clearly alerted the individual to important terms on the back of the contract, and disclosed its arbitration terms, leading the Court to compel arbitration of Williams' claims.
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