Reference no: EM132113846

VASSILKOVSKA V. WOODFIELD NISSAN, INC.

830 N.E.2d 619 (Ill. App. 2005)

Nadejda Vassilkovska purchased used car from Woodfield Nissan. In an agreement separate from the purchase contract, Vassilkovska promised to arbitrate any claim against Woodfield instead of suing in court. Woodfield promised to arbitrate claims against Vassilkovska as well, but excluded several different types of claims from the agreement. In fact, the excluded claims were the only circumstances in which Woodfield would ever be likely to sue a customer. Subsequently, Vassilkovska sued Woodfield for misrepresenting the price of the car in a financing agreement. Woodfield argued that Vassilkovska was required to arbitrate the claim. The court had to address whether the arbitration agreement was valid.

JUSTICE GARCIA DELIVERED THE OPINION OF THE COURT.: An agreement to arbitrate is treated like any other contract. . . . However, without a contract to arbitrate, there can be no forced arbitration. . . .

The plaintiff contends that the Arbitration Agreement is not a contract at all because any promise to arbitrate by Woodfield was illusory and, therefore, the Arbitration Agreement is unenforceable because of the absence of the essential requirement of consideration to make out an enforceable contract. . . .

Woodfield asserts that the parties’ Arbitration Agreement was supported by consideration and argues its retention of certain rights does not invalidate that consideration.

The plaintiff, on the other hand, contends that Woodfield’s promise to arbitrate was “illusory” and there was no consideration because Woodfield “made sure that as to every conceivable right that it might want to press, the arbitration provision did not stand as a bar to [Woodfield’s] going to court.”

We agree with the plaintiff. A legally enforceable contract is an exchange, and the elements of a contract include offer, acceptance, and consideration. . . . “It is a basic tenet of contract law that in order for a promise to be enforceable against the promisor, the promisee must have given some consideration for the promise.” Gibson, 121 F.3d at 1130. Consideration is defined as a bargained-for exchange, whereby the promisor, here, the plaintiff, receives some benefit, or the promisee, here, Woodfield, suffers detriment. . . . Thus, in order for the plaintiff’s agreement to arbitrate, rather than to litigate, any claim against Woodfield, there must be some detriment to Woodfield, or some benefit to the plaintiff, that was bargained for in exchange for the plaintiff’s promise to arbitrate all disputes. Clearly, what is required is consideration, as with any contract . . . .

. . . Woodfield cannot point to its own promise to arbitrate in order to make enforceable the plaintiff’s promise to do likewise. . . . The Arbitration Agreement contains no promise on Woodfield’s part to submit claims to arbitration. . . . In fact, the Arbitration Agreement, by virtue of the exceptions outlined in it, leaves no claim that Woodfield would be required to submit to arbitration. . . . The language of the Arbitration Agreement makes clear that its purpose is to force the plaintiff to arbitrate any claim she may assert against Woodfield, while excluding Woodfield from that same promise. There is nothing in the Arbitration Agreement to suggest that Woodfield was required to forgo a judicial forum in favor of arbitration. Therefore, we conclude that the Arbitration Agreement itself did not contain consideration for the plaintiff’s promise in the form of a promise by Woodfield to submit disputes to arbitration. . . .

Develop a 300-word case study using the following format: facts, issues, rule, analysis, and conclusion.

Analyze whether Woodfield's actions in drafting the arbitration agreement were ethical.

Discuss what remedies Vassilkovska may seek if Woodfield is found to have misrepresented the price of the car as alleged.