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Second District Invalidates Form Arbitration Clause Pre-Printed on Back Page of Auto Sale Contract

In Arbitration, Concepcion on June 5, 2013 at 4:47 pm
Lone Star Auto Sales

Lone Star Auto Sales (Photo credit: jamesmixon84)

The Second District yesterday invalided an arbitration clause pre-printed on the back of an auto sales contract.  Vargas v. SAI Monrovia B, Inc., No. B237257, __ Cal. App. 4th __ (2d Dist. June 4, 2013).  The court revisited its holding in Sanchez v. Valencia Holding Co., LLC, 201 Cal. App .4th 74 (2012), review granted March 21, 2012, S199119.  In Sanchez the court held that a “Retail Installment Sale Contract” used to purchase an automobile is unconscionable and unenforceable.  In Vargas, the court again concluded that the identical sale contract does not require the arbitration of disputes between a purchaser and a car dealer because it is permeated by unconscionability.  You can read more here.

By CHARLES H. JUNG

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