When are the parties to an illegal agreement in pari delicto

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Reference no: EM131192604

1. When are the parties to an illegal agreement in pari delicto?

2. John Iwen sued U.S. West Direct because of a negligently constructed yellow pages advertisement. U.S. West Direct moved to stay litigation and compel arbitration under the yellow pages order form, which required advertisers to resolve all controversies through arbitration, but allowed U.S. West (the publisher) to pursue judicial remedies to collect amounts due it. Under the arbitration provision, Iwen’s sole remedy was a pro rata reduction or refund of the cost of the advertisement. The order form language was drafted by U.S. West Direct on a take-it-or-leave-it basis and stated in part:

Any controversy or claim arising out of or relating to this Agreement, or breach thereof, other than an action by Publisher for the collection of amounts due under this Agreement, shall be settled by final, bind- ing arbitration in accordance with the Commercial Arbitration rules of the American Arbitration Association.

If forced to arbitration, Iwen would be unable to recover damages for the negligently constructed yellow pages ad, nor could he recover damages for infliction of emotional distress and punitive damages related to his many efforts to adjust the matter with the company, which were ignored or rejected. Must Iwen have his case resolved through arbitration rather than a court of law? [Iwen v. U.S. West Direct, 977 P.2d 989 (Mont.)]

Reference no: EM131192604

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