The Alabama Supreme Court has ruled that a used-car dealership can force a dissatisfied customer to arbitrate her claims even though no dealership officer signed the bill of sale that contained a mandatory arbitration clause,
The decision is significant because it recognizes the ability of dealerships to accept contracts through their conduct even if the dealership management doesn't sign them, said Troy Grayson of Birmingham, the lawyer who represents Quality Truck and Auto Sales Inc. of Pelham in the appeal.
The case arose from the March 1997 sale of a 1991 Mercury Capri for $7,193. Gail Yassine signed a bill of sale containing a standard arbitration provision. Quality did not sign the bill of sale, but it did sign the related retail installment contract.
The car was sold as is.
Yassine experienced problems with the car and took it for repairs to a garage that was not affiliated with Quality, but she did not pay for the work, apparently believing the charge was too high, Grayson said.
The garage later sold the Capri as an abandoned vehicle, he said.
Yassine sued Quality in Shelby County Circuit Court for misrepresentation, a truth-in-lending violation, mental anguish and fraudulent concealment of defects. The complaint sought $350,000 in compensatory and punitive damages.
Quality, which disputes the allegations, asked the circuit judge to send the case to arbitration. The judge refused, and the dealership appealed to the Alabama Supreme Court. The Supreme Court ruled that the arbitration agreement is valid, that all Yassine's claims fall under the provision and that the language of Quality's bill of sale does not require the dealership's signature, only that it be 'accepted.'
Although Quality did not sign the bill of sale, its actions demonstrated that it accepted the contract as binding, the court said.
'Quality assented to the contract by giving up possession of one of its vehicles in return for Yassine's agreement to pay,' the court said, 'and the absence of Quality's signature does not render that contract or the arbitration provision unenforceable.'