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Arbitration Clause in Buyer’s Order Unenforceable Where RISC Contained Merger Clause
By Katherine C. Fisher

You, or someone in your corner, drafted the forms you use every day to document your transactions. But sometimes these same documents that were meant to help you can end up hurting you.

It’s important that you understand your documents and how they work together because wording in one document can sometimes override otherwise helpful language, such as an arbitration clause, in another document. To see what I mean, read on.

Cassandra and Alton Rogers bought a vehicle from Duval Motors Company. At the dealership, the Rogerses signed a retail buyer’s order and then signed a retail installment sales contract. The RBO contained an arbitration provision. The RISC included a merger clause stating that “this contract contains the entire agreement between you and us relating to this contract.” However, the RISC did not contain an arbitration provision.

The Rogerses accepted delivery of the vehicle after they signed all of the documents related to the sale. Two weeks later, Duval allegedly demanded an additional $5,000 down payment. When the Rogerses refused to pay, Duval repossessed the vehicle. The Rogerses sued Duval. In response, Duval moved to compel arbitration under the terms of the RBO. The Rogerses objected, arguing that the merger clause in the RISC precluded consideration of the arbitration clause in the RBO.

The trial court denied Duval’s motion to compel arbitration, finding that no binding arbitration agreement existed with respect to the transaction at issue. Duval appealed to the Florida Court of Appeal.

The appellate court affirmed the trial court’s decision, finding that the merger clause in the RISC made it clear that the RISC was intended to constitute the entire agreement between the parties related to the vehicle purchase. As a result, the arbitration provision in the RBO was unenforceable.

Other courts dealing with similar facts have used a more common sense approach, deciding that when a number of documents are signed at the same time in connection with the same transaction, they should be read together, where possible. Using that approach in this case would have resulted in enforcement of the arbitration provision.

This case is a reminder that not all courts will be on your side, especially when the documents they are asked to consider are documents that you provided to the consumer, not the other way around. So make sure you read your documents and, while you’re at it, give copies to your lawyer to look over too.

Duval Motors Company v. Rogers, 2011 Fla. App. LEXIS 9344 (Fla. App. June 21, 2011).

Katherine C. Fisher is an associate in the Maryland office of Hudson Cook, LLP. Kate can be reached at 410-782-2356 or by email at kfisher@hudco.com.

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