Question: A customer picks up the phone, orders a Keystone 2000 computer, and gives a credit card number. Presently a plain shipping box arrives, with only
A customer picks up the phone, orders a Keystone 2000 computer, and gives a credit card
number. Presently a plain shipping box arrives, with only an address label and "fragile"
warnings on the outside and containing on the inside the Keystone 2000 computer and a list
of terms, said to govern unless the customer returns the computer within 30 days. One of the
terms in the box was an arbitration clause. Rob, the customer, kept the computer more than
30 days before complaining about its components and performance. Rob filed suit in federal
district court in the Seventh Circuit, arguing, among other things, that Keystone had engaged
in mail and wire fraud, and that the ProCD v. Zeidenberg Seventh Circuit Court of Appeals
decision only applied as binding precedent to software, not computers. Keystone asked the
district court judge to enforce the arbitration clause, and not allow Rob to bring his suit in
federal district court. The judge refused, writing that "[t]he present record is insufficient to
support a finding of a valid arbitration agreement between the parties or that the plaintiffs
were given adequate notice of the arbitration clause." Keystone, relying on ProCD, took an
immediate appeal to the Seventh Circuit Court of Appeals. What result?
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