Reference no: EM133659222

Loria Pitchfork thinks Jay Pitchfork needs a special tool to do his handyman work around the house they just purchased. She finds a somewhat unique-looking small handheld saw with multiple blades that looks like just the right tool, buys it, and presents it to him on his birthday. It is manufactured and sold online by Big Business Modern Tools, a huge online rival to big box stores such as Home Depot, carrying thousands of tools for the home fixer up types and selling millions of units per year.

Jay is ecstatic and immediately opens it up, reads the very simple first page on how to use it, and does not look at the next three pages. He is at their new house doing some small repairs, and while using the saw to do an ordinary cut, the blade jumps free, even though he has securely attached it per the instructions that came with it, slicing deep into his hand. He wraps it and rushes to the local hospital, where he is stitched up.

Distraught, Jay comes to you, his trusty attorney, and wants to pursue a claim for damages because of the injury he received. He lives in North Carolina and has heard great things about court-ordered arbitration as a quick way to resolve a claim without having to wait for trial.

Additionally, in his haste to get to the hospital to get stiches to stop the bleeding, he left the saw plugged in, and it overheated, causing a fire that burned down his house (which was not insured because he just moved in).

However, as you begin to review the instruction manual to make sure Jay did attach and use the saw correctly, you quickly see that beginning on page 2, there is a mandatory arbitration agreement wherein the buyer agrees that states:

All claims and disputes arising under or relating to this Agreement are to be settled by a private binding arbitration. The arbitration shall be conducted on a confidential basis pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Any decision or award as a result of any such arbitration proceeding shall be in writing and shall provide an explanation for all conclusions of law and fact and shall include the assessment of costs, expenses, and reasonable attorneys' fees. Any such arbitration shall be conducted by a private arbitrator selected by the seller and awards are to be limited to loss of the value of the saw.

Jay is outraged and insists that it is not fair, should not be legal, and cannot believe the courts would enforce such an agreement. He also wants to know which type of arbitration would favor him and why? Research the applicable law as stated for court-ordered arbitration in North Carolina and private arbitration agreements in consumer purchases and advise him which applies. Please give him your opinion on why or why not each is enforceable. In the case of the private arbitration agreement, if there are loopholes or legal precedents to avoid it and proceed via the North Carolina arbitration statute. Be sure to cite applicable case law and statutes supporting your position.

Be sure to:

1. List the requirements and procedures for both court and private arbitration.

2. Compare the advantages to Jay in using either court or private arbitration in this case.

3. Distinguish which form of arbitration can be used in this case.

4. Analyze the existing case law governing whether a binding consumer arbitration agreement is enforceable in this scenario.