assignment #1

LEGAL & REGULATORY ENVIRONMENT – Business Law

ASSIGNMENT #1 – Ch. 3: Alternative Dispute Resolution (ADR) – Arbitration

[This assignment is worth a total of 10 points.]

Answer the following question in essay format. Your essay must be single spaced and between 15 and 20 sentences long.

Thomas Baker and others who bought new homes from Osborne Development Corp. sued for multiple defects in the houses they purchased. When Osborne sold the homes, it paid for them to be in a new home warranty program administered by Home Buyers Warranty (HBW). When the company enrolled a home with HBW, it paid a fee and filled out a form that stated the following: “By signing below, you acknowledge that you . . . consent to the terms of these documents including the binding arbitration provision contained therein.” HBW then issued warranty booklets to the new homeowners that stated: “Any and all claims, disputes and controversies by or between the Homeowner, the Builder, the Warranty Insurer and/or HBW . . . shall be submitted to arbitration.”

Question : Should the new homeowners be bound by the arbitration agreement, or should they be able to sue the builder, Osborne, in court?

****Format : Your essay should have an introductory paragraph that contains a very brief summary of the case and what the issue(s) is/are. Then, argue both sides in a systematic way. So, your essay should introduce one side’s argument in a paragraph or 2. Next, your essay should set forth the opposing side’s arguments in the next paragraph or 2. Finally, our essay should conclude with the way you believe the court will most likely rule.

[You may work (and I strongly suggest you work) in study groups for this assignment. However, your essays should not have the same wording.]

Incorporate as precedent : NCR Corp. v. Korala Associates, Ltd., U.S. Court of Appeals, Sixth Circuit, 512 F.3rd 807 (2008)

http://genius.com/United-states-court-of-appeals-sixth-circuit-ncr-corp-v-korala-associates-ltd-annotated

LEGAL & REGULATORY ENVIRONMENT – BLAW 2210; Sections 3 & 4

ASSIGNMENT #1 – Chapter 3: Arbitration

Sample Answer:

The arbitration agreement was not binding on the homeowners, so they could sue the builder, Osborne, in court. Osborne signed the contract with HBW; that did not bind the homeowners to the agreement because they were not parties to the agreement. The appeals court held the arbitration agreement to be “oppression” against the homeowners. As such, the agreements were one-sided and unconscionable. The homeowners were handed the warranty agreement at the time of closing (final sale) on their houses, but they did not know the terms of the warranty and had no chance to bargain over it. They did not give up their right to sue Osborne for breach of contract and other claims.