The National Arbitration Forum Blog

A business cannot draft an arbitration agreement that is tilted in its favor, according to the Wisconsin Supreme Court.

In Wisconsin Auto Title Loans, Inc. v. Jones, the preprinted loan agreement contained an arbitration provision under which the parties agreed to arbitrate all claims “save and except [Title Loan’s] right to enforce [Jones’] payment obligations in the event of default, by judicial or other process, including self-help repossession.”

When Jones defaulted on the loan, Title Loans sued to recover possession of his car. Jones counterclaimed, and Title Loans moved to compel arbitration of the counterclaims. In an order affirmed by the court of appeals, the trial court denied Title Loans’ motion to compel arbitration on the ground that the arbitration provision was unfair and one-sided.

The Wisconsin Supreme Court found that the arbitration agreement was defective due to its one-sidedness of allowing Title Loans to seek replevin and deficiency judgment in court.

My view: This case illustrates exactly how not to go about drafting a valid agreement to arbitrate. People who agree to use arbitration to resolve their legal disputes need a level playing field.

When disputing legal parties agree to have their dispute resolved under the National Arbitration Forum’s arbitration rules, they are assured of having available to them the same legal remedies as court, but at a much more reasonable cost. See What the Courts Say about our arbitration rules and system.

--Curtis Brown

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