For Arbitration Waiver to Be Unconscionable and Unenforceable, It Must Show at Least Modicum of Both Procedural and Substantive Unconscionability

In MuniCommerce, LLC v. Navidor, Ltd. (Sic), 184 So. 3d 635 (Fla. 4th DCA 2016), the Fourth District Court of Appeal found that the trial court failed to apply the plain language of an independent sales agent agreement in compelling mediation and arbitration between a company and its agent.  The agreement required mediation and arbitration except where the agreement was terminated based on the company’s good faith determination that the sales agent’s conduct constituted unsound business practices.  The agent argued that this waiver of mediation and arbitration based on the company’s unilateral determination of the agent’s conduct was unconscionable and unenforceable, and the trial court agreed.

In reversing, the Fourth District noted that for a waiver to be unconscionable, the waiver must show at least a modicum of both procedural and substantive unconscionability.  Here, the waiver did not allow the company to terminate for any reason to unilaterally avoid mediation and arbitration.  Further, the waiver was not so “outrageously unfair” as to be substantively unconscionable.

Donna Greenspan Solomon, Esq., handles business-related appeals, mediation, and arbitration. Donna also co-counsels and serves as freelance business litigator for those wishing to expand the bench strength of their practices without expanding their overhead. Donna is one of only two attorneys certified by The Florida Bar as both Appellate Specialist and Business Litigator.  Donna is a Member of the AAA’s Roster of Arbitrators (Commercial Panel).  She is a FINRA-Approved and Florida Supreme Court Qualified Arbitrator.  She is also a Certified Circuit, Appellate, and Family Mediator.  For more information, call Donna at (561) 910-0054, email Donna@SolomonAppeals.com, or visit http://www.solomonappeals.com.

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For Arbitration Waiver to Be Unconscionable and Unenforceable, It Must Show at Least Modicum of Both Procedural and Substantive Unconscionability

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