ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Friday, November 19, 2021

Are Fridgewrap Arbitration Clauses Enforceable

Contracts Prof Alan Hyde shared this image of the lovely surprise his student received upon opening the door of a new refrigerator.

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As I read the draft Restatement of Consumer Contract Law § 2(b)(3), such terms would only become a part of the contract if "after the standard contract term is made available for review, the consumer has a reasonable opportunity to terminate the transaction without unreasonable cost, loss of value, or personal burden, and does not exercise that power."  Does that mean that the arbitration clause is not part of the contract if the student had to pay a non-refundable delivery/installation clause and could not return the fridge without cost?

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Yes, at the least. I would also require the seller to have given notice in advance that the fridge would come with additional terms inside and that contract formation would be delayed until the consumer had an opportunity to read and then accept or reject the whole contract, with the seller paying for return costs. Absent that, it should just be a proposal for modification, inviting the consumer to reply by letter with the message, "Great idea! Sure, let's add an arbitration clause to our contract!" Fun hypo: suppose that these terms were affixed to the inside of the fridge on display at a big box store, that the customer had an opportunity to open the fridge while inspecting the fridge on display, and ordered it from the store without opening the door (which would be unusual) and inspecting the inside. Terms conveyed prior to standard contract formation?

Posted by: Charles Calleros | Nov 19, 2021 9:04:14 AM