Following the construction industry and related legal topics in the United States.


Monday, February 4, 2008

Landmark Supreme Court Decision Could Expose Businesses To N.C. Consumer Class Actions And More

In a landmark decision by a divided court, the Supreme Court of North Carolina declared an arbitration clause in a consumer loan agreement unconscionable. The case, Tillman et al v. Commercial Credit Loans, Inc. et al, is important to all businesses contracting with N.C. consumers. Those who do not consider and react to its implications may find themselves, among other things, the targets of class action law suits they thought they had contracted away.

Typically, unconscionability arises where there is such inequality in the bargain that it shocks the judgment of a person of common sense. Historically, that has proven to be a high standard but the facts upon which the principal and concurring opinions in Tillman are based are not as extreme as one might expect. Thus, Tillman could mark a sea change in the way that trial and appellate courts assess and enforce contractual arbitration provisions.

Continued...

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