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Because a non-signatory to an arbitration agreement performed in accordance with the contract, and because proper application of the doctrine of "equitable estoppel" demands it, a Texas Federal District Court found an arbitration agreement to be valid.
In Bradford v. Robert Peltier Nissan Pontiac, No. 6:06-CV-477, 2007 WL 865685 (E.D. Tex. Mar. 15, 2007), Bradford purchased a Chevrolet pickup truck from Robert Peltier Nissan Pontiac (Peltier), which allegedly was a "buy back" under a Texas Lemon Law for inoperative steering. Bradford signed a purchase order that contained an agreement to arbitrate all disputes arising under the contract. However, though the terms of the agreement required Peltier's signature in order for the agreement to be valid, Peltier did not sign.
In determining that the agreement to arbitrate was nevertheless valid, the Court noted first that Peltier, by performing under the contract, had manifested a "different method" of accepting the terms of the agreement. That is, by selling the car under the terms of the purchase order, Peltier effectively said "yes" to that contract, and to all its terms, including the arbitration agreement.
If that wasn't enough, the Court also noted that because Bradford's suit against Peltier relied on the terms of the contract, he was bound through the doctrine of "equitable estoppel" to arbitrate the dispute in accordance with the terms to which he had agreed.
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