Back in July 2002, Nadejda Vassilkovska, the plaintiff, bought a used automobile from Woodfield Nissan Inc. In addition to the contract of sale, the plaintiff signed an agreement (Arbitration Agreement). After a year, the plaintiff filed a four-count complaint against the company. A few months later, the company, Woodfield Nissan filed a motion to compel and dismiss the arbitration. In this case study, we will discuss the legally required elements necessary to form a contract, the ethical considerations, and the remedies for breach.
The Vassilkovska v. Woodfield Nissan Inc. The case brings up the issues that may go in the wrong direction, especially when a person enters into a contract with another party through a signed agreement. In many cases, companies will try to avoid engaging in an action and craft the agreement and contract to favor the benefits on their sides (Grande, & American Bar Association. 2002). This act is not ethical and can result in a court ruling that the contract is illusory. In the Vassilkovska v. Woodfield Nissan case, the signing of the Arbitration Agreement made the plaintiff agree to waive her right to pursue any cause of action that was related to the transaction of the sale of the automobile, in the Court. In turn, the company agreed to waive any right to pursue any legal action in court, except the rights that were listed in the Arbitration Agreement. After some time later, she received a financing agreement from her lender indicating that the amount due was $7,235.12 in her vehicle. She discovered that a $2,636.68 discrepancy between the uncleared balance on the sales contract and also the amount due in the financing agreement.
In this case, we discover that after she purchased a used vehicle from Woodfield Nissan, it is evidently misrepresented by the original amount. This act made Vassilkovska sue the company, but Woodfield Nissan argues that she had agreed to arbitrate the claim instead of representing it to court. Furthermore, the Woodfield Company was not able to enforce the Arbitration agreement. The contract could not be biased if it attracted different consideration from every party.
Issues of the Case
In the Vassilkovska v. Woodfield Nissan Inc. The case, the first problem is that Woodfield attempted to compel the complete compliance with the agreement for which there was no mutual consideration. In fact, he says that the entire agreement violated no policy depending on the prior arbitration agreements upheld. Also, much to the company’s dismay, Woodfield Nissan listed out each circumstance in which they would litigate against the plaintiff. After the Woodfield Nissan presented the motion, the plaintiff responded by emphasizing various facts. In specific, the plaintiff was looking to purchase a vehicle, and she had informed the seller that her spending limit is between $5000 to $7000, but displayed her a $9000 car and convinced to purchase. According to Vassilkovska, she argued that the Arbitration Agreement could not be enforced since she was seeking rescission of the whole contract. Another issue was that there was lack of consideration to support the Arbitration Agreement and of course, the Woodfield Company tried to defeat Vassilkovska’s substantive rights under the Consumer Fraud Act as well as against the public policy.
The Court Ruling
According to the case, the Uniform Arbitration Act authorizes the Courts of law, upon any application of the party displaying the agreement to arbitrate, stay or compel court action pending arbitration (Bickford, & Margolis, 2006). Therefore, the state of Illinois discovers that an agreement to arbitrate is treated just like any other contract. However, without any contract to arbitrate, there can be no forced arbitration. The plaintiff, Vassilkovska, contends that the Arbitration Agreement is not a contract at all since any promise to intervene due to the absence of any crucial requirement of consideration. On the case of considerations, the plaintiff contends that the promise made by Wood field Nissan to arbitrate was Illusory. A legally enforceable contract is an explicit exchange, and the elements of the agreement include the acceptance, offer and of course, the consideration (Weigand, 2009). Therefore, for the agreement to arbitrate, rather than to litigate, there must be the various detriment to the Automobile Company or several benefits to the plaintiff. These expenses and allowances must be bargained for in exchange for the promise to arbitrate every dispute.
Analysis and Conclusion
In this case, the purchasing contract, as well as the Arbitration Agreement, are separate documents. In fact, the Arbitration Agreement is not encompassed by the purchasing contract. Therefore, it requires its separate consideration. It is clear that Woodfield Nissan’s retention of the right to litigate the causes of action in court against the plaintiff has invalidated its consideration that was present in the clause opening of the Arbitration Agreement.
Consequently, the Woodfield Nissan Inc. failed to provide all the considerations to support the agreement of arbitration. The entire argument of the company to the trial court that it would agree to a unilateral modification of the agreement to seek a judicial remedy, in this case, carries no weight since that agreement was not in place during the signing of the Arbitration Agreement by the two parties.
- Bickford, G. T., & Margolis, H. S. (2006). The ElderLaw portfolio series. Austin: Wolters Kluwer.
- Grande, T. R., & American Bar Association. (2002). Survey of state class action law, 2002: A report of the State Laws Subcommittee of the Class Actions and Derivative Suits Committee, Section of Litigation, American Bar Association. St. Paul, Minn.: Thomson West.
- Weigand, F.-B. (2009). Practitioner’s Handbook on International Commercial Arbitration. Oxford: OUP Oxford.