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BUSINESS LAW 14: Plaintiff argues no agreement to arbitrate.

In this contract dispute, Plaintiff is a designer and manufacturer of plastic components that are sold to manufacturers in the automotive industry. Defendant designs and installs manufacturing systems that are used to produce plastic components.

Plaintiff verbally requested a price quotation from defendant for the design and installation of a manufacturing system that was capable of producing plastic components that plaintiff sold to automobile manufacturers. Defendant sent plaintiff a written price quote for the design and installation of the manufacturing system and plaintiff accepted defendant’s offer.

Shortly after defendant installed the manufacturing system, plaintiff began experiencing significant production problems. Plaintiff thereafter filed this action seeking compensation from defendant for damages stemming from the defective manufacturing system. In lieu of answering plaintiff’s complaint, defendant moved for summary disposition pursuant to MCR 2.116(C)(7), contending that the contract was subject to an arbitration provision.

Plaintiff argues that the parties had no agreement to arbitrate.

To ascertain the arbitrability of an issue, a court must consider whether there is an arbitration provision in the parties’ contract, whether the disputed issue is arguably within the arbitration clause, and whether the dispute is expressly exempt from arbitration by the terms of the contract. As a threshold matter, it must be determined whether there was an arbitration provision in the parties’ contract.

The quote provided by defendant to plaintiff included a provision stating that the offer is based on the General Terms and Conditions of Delivery and Service release of 1st July 2007. The General Terms and Conditions of Delivery and Service can either be seen on our website or be provided on request.

The terms stated if the purchaser’s registered office is located outside the Federal Republic of Germany, defendant is entitled alternatively to choose to have disputes that arise under this agreement or about its effectiveness finally decided by one or more arbitrators appointed by these rules of arbitration.

Plaintiff assented to the terms of the price quotation, and it did not raise any concerns regarding the applicability of the General Terms. Mere failure to read an agreement is not a defense in an action to enforce the terms of a written agreement.

Plaintiff does not present any evidence that an alternative version of the terms and conditions may have been incorporated into the parties’ contract or that an alternative version of the terms and conditions existed at the time of contracting.

In lieu of answering plaintiff’s complaint, defendant moved for summary disposition pursuant to MCR 2.116(C)(7), contending that the contract was subject to an arbitration provision. The trial court agreed, granting summary disposition in defendant’s favor.

At Aldrich Legal Services, our attorneys offer comprehensive business law services for business owners, shareholders,  and employers.

Many business litigation matters center on complex agreements. Our dedicated lawyers and staff can provide you with the practical corporate and legal guidance you need.

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