In three court decisions in the past several months one can argue "read the contract before you sign" – and understand the law that applies – affected results. In one, a court needed to decide which of two contracts, controlled. In the second, the party seeking to enforce the contract was unable to do so – because they wrote it so the provision on which they relied was unenforceable. In the third, an amendment so that the contract was enforceable, even decades later. Courts typically enforce contracts as written and agreed to by two parties. "Do-overs" are disfavored. A fourth decision dealt with inadequate evidence of consumer "clickwrap" Terms and Conditions -- a failure to prove a particular contract was read and signed by a particular consumer.
1. Coinbase, Inc. v. Suski, 144 S. Ct. 1186 (2024)
Coinbase v. Suski involved two contracts and the dispute was about which of two contracts controlled. "The first contained an arbitration provision with a delegation clause; per that provision, an arbitrator must decide all disputes under the contract, including whether a given disagreement is arbitrable. The second contract contained a forum selection clause, providing that all disputes related to that contract must be decided in California courts." While the ruling in the Supreme Court was that it is a court that should decide contract enforceability, hindsight permits the observation: if there were two contracts, why was not the second contract clear that it replaced the first contract? Read the first contract when writing the second – and make it clear. Another solution could be "boilerplate" that clarifies generally what happens if there are conflicting contracts.
2. Rodgers-Rouzier v. American Queen Steamboat Operating Company, LLC, 104 F.4th 978 (7th Cir. 2024)
In the Rodgers-Rouzier case it appears American Queen Steamboat outsmarted themselves in exercising control over labor disputes. The contract specifically included an arbitration clause that said the Federal Arbitration Act applied. The drafter of the contract, unfortunately for them, apparently failed to either understand the business or to look up the statute said to control. A "steamboat" company chose to have controlling a law that excluded maritime contracts. The argument "we didn't mean just Federal, we meant Indiana, too" was unsuccessful. Knowing what law applies, when the contract invokes that law is a fundamental. Similarly to the above, "boilerplate" might be written to save the intent – "Federal Arbitration applies, but if it doesn't the law of the forum state applies ...".
3. Zimmer Biomet Holdings, Inc. v. Insall, 108 F.4th 512 (7th Cir, 2024)
Zimmer has become a very successful company in the medical field. An important part of the business is making and...
