Fadal Machining Centers, a machine and machine parts manufacturer, sued Compumachine, one of its distributors, for breach of contract. Under the distributorship agreement, a hard copy of which was attached to Fadal’s complaint, any legal action arising out of the contract would be heard in a California federal district court. The agreement also stated that Fadal could establish the terms of sale on occasion. Each of the fifteen allegedly unpaid invoices referred to Fadal’s website for the terms and conditions of sale. The terms found on the web-site under the label “Contract” in large bold type, included an arbitration clause and a statement that they would prevail over any other agreement. Should Fadal’s claim be heard in the California federal district court, or be submitted to arbitration? Decide and explain.
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