Cengage Advantage Books: Fundamentals of Business Law Today 10th Edition by Roger LeRoy Miller

Exercise 25

Spotlight on Arbitration Clauses-Unconscionable Contracts or Clauses. Roberto Basulto and Raquel Gonzalez, who did not speak English, responded to an ad on Spanish-language television sponsored by Hialeah Automotive, LLC, which does business as Potamkin Dodge. Potamkin's staff understood that Basulto and Gonzalez did not speak or read English and conducted the entire transaction in Spanish. They explained the English-language contract, but did not explain an accompanying arbitration agreement. This agreement limited the amount of damages that the buyers could seek in court to less than $5,000, but did not limit Potamkin's right to pursue greater damages. Basulto and Gonzalez bought a Dodge Caravan and signed the contract in blank-that is, leaving some terms to be filled in later. Potamkin later filled in a lower trade-in allowance than agreed and refused to change it. The buyers returned the van-having driven it a total of seven miles-and asked for a return of their trade-in vehicle, but it had been sold. The buyers filed a suit in a Florida state court against Potamkin. The dealer sought arbitration. Was the arbitration agreement unconscionable? Why or why not? [Hialeah Automotive, LLC v. Basulto, 22 So.3d 586 (Fla.App. 3 Dist. 2009)] (See pages 235-236.)