2017 | Marzo 3
An arbitration provision for Samsung Galaxy S smartwatches is nonenforceable in a class action claiming the company exaggerated the product’s battery life, the U.S. Court of Appeals for the Third Circuit has ruled.
A stipulation mandating binding arbitration, printed on page 97 of a 143-page product manual, is not a valid contractual term because the court could not presume that consumers read or had notice of the terms, the court ruled Friday in Noble v. Samsung Electronics America. The appeals court affirmed a ruling by a federal judge in Newark that held the arbitration provision nonbinding.
Validity of the arbitration clause in the case was determined by New Jersey law, which requires mutual assent between the parties for a contract to be binding, Judge Kent Jordan wrote. Jordan was joined on the panel by Chief Judge D. Brooks Smith and Judge Patty Shwartz. Mutual assent requires reasonable notice to the contracting parties of the contract’s terms, the court said. But when the writing does not appear to be a contract and the terms are not called to the attention of the recipient, there is no reasonable notice and terms cannot be binding, the court said. Therefore, an arbitration clause is binding only when the terms are reasonably conspicuous, rather than in a manner that de-emphasizes its provisions, the court said.