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COMPLIANCE TIPS

they had read all pages of the agreement arbitration clause. The end result? The lack
You can find links to the CFPB develop- and agreed to all terms and conditions. Di- of quality control cost the dealership an im-
ments at http://www.consumerfinance.gov/ rectly above that sentence was a checkbox portant defensive tool – the ability to force
activity-log/. with the sentence: “Buyer acknowledges the buyers to arbitrate their claims. See
that if this box is checked, this agreement Stubblefield v. Best Cars KC, Inc., 2016 Mo.
Case of the Month contains an arbitration clause.” The box was App. LEXIS 1211 (Mo. App. November 22,
not checked. The arbitration clause was lo- 2016).
Arbitration Clause Not Incorporated into cated on the back of the contract under the
Vehicle Sales Contract Where Checkbox heading “additional terms and conditions.” So there’s this month’s roundup! Stay legal,
Acknowledging Arbitration Clause Was The trial court denied the dealership’s mo- and we’ll see you next month. n
Not Checked: We urge dealers to have a tion to compel arbitration, and the Court __________________________________
formal checklist to use in completing a deal of Appeals of Missouri affirmed. The ap- Tom (thudson@hudco.com) and Nikki
jacket. One of the items on the checklist pellate court concluded that the buyers did (nmunro@hudco.com) are partners in the
should be to ensure that signatures and not agree to arbitrate. The appellate court law firm of Hudson Cook, LLP. Tom has
initials appear when they are supposed to. found that the plain meaning of the sen- written several books and is the publisher
Our Case of the Month illustrates what tence next to the checkbox was that if the of Spot Delivery®, a monthly legal newslet-
happens when this sort of quality control box was checked, the arbitration clause on ter for auto dealers. He is Editor in Chief
breaks down. Car buyers sued the dealer- the back of the sales contract was includ- of CARLAW®, a monthly report of legal de-
ship where they bought their car. The deal- ed as a term in the sales contract. Because velopments for the auto finance and leasing
ership moved to compel arbitration under the box was not checked, the arbitration industry. Nikki is a contributing author to
an arbitration clause in the sales contract. clause was not incorporated into the sales the F&I Legal Desk Book and frequently
The front page of the contract stated that contract. The appellate court rejected the writes for Spot Delivery. Visit www.coun-
additional terms and conditions were on dealership’s argument that, even though the selorlibrary.com. Copyright CounselorLi-
the reverse side. The buyers’ signatures box was not checked, the buyers agreed to brary.com 2016, all rights reserved. Single
appeared at the bottom of the front of the be bound by all of the terms and conditions publication rights only, to the Association.
contract beneath a sentence that stated that on both sides of the contract, including the (1/17). HC# 4825-9426-3616 v.1.

we are. counselorlibrary.com

877-464-8326

GIADA Independent Auto Dealer FEBRUARY 2017 | 49