“The arbitration provision was highlighted, apparent, and not oppressive, and it should not have taken Mr. Mance by surprise.” —Beeler, Judge 

Facts: Demetrius Mance purchased a new Mercedes-Benz E350 automobile from a Mercedes-Benz dealer in Sacramento, California. The automobile was distributed by Mercedes-Benz USA. To purchase the car, Mance signed a Retail Installment Contract. In the contract, Mercedes-Benz warranted to preserve and maintain the utility and performance of the vehicle. The contract contained an arbitration clause that states that any claim or dispute between the parties will be decided by arbitration, and not by a court proceeding. The arbitration clause was highlighted by bold, capitalized text. The arbitration clause provided for binding, nonappealable arbitration. Mance experienced numerous problems with the automobile, but Mercedes-Benz has not repaired the car satisfactorily to Mance. Mance filed this lawsuit in U.S. district court against Mercedes-Benz for breach of express and implied warranties, alleging that the arbitration clause was unconscionable. Mercedes-Benz made a motion for an order compelling Mance to arbitrate his claims. 

Issue: Is the arbitration clause enforceable? 

Language of the Court The arbitration provision was highlighted, apparent, and not oppressive, and it should not have taken Mr.  Mance by surprise. He argues that the binding arbitration would leave him with limited appeal rights, but conclusiveness is one of the primary purposes of arbitration. The arbitration clause provides Mr. Mance with a choice of two common arbitration associations and allows him to suggest an alternative. Mr. Mance’s unconscionability argument fails. 

Decision: The U.S. district court held that the arbitration clause was enforceable and granted Mercedes-Benz’s motion to compel arbitration. 

Ethics Questions: Is it ethical for sellers to make consumers go to arbitration rather than to court? Did Mance know that he was subject to the arbitration agreement?