Aguillard v. Auction Management Corp.

Dave Aguillard (plaintiff) attended a public auction of real estate property at which he was required to sign the auction terms and conditions, confirming that he read, understood, and would be bound by the provisions. The terms and conditions were prepared by Auction Management Corporation (defendant), the auction’s closing coordinator. The document was two pages long and contained, among its provisions, a single-sentence paragraph describing an arbitration clause. The arbitration clause was printed in the same font type and size as the rest of the provisions. Aguillard submitted a winning bid on a property and was required to sign a real estate sales agreement. The property seller (defendant) refused Aguillard’s bid and refused to close or execute the sales agreement. The seller submitted a counteroffer, which Aguillard refused. Aguillard sued in federal district court to enforce the sales agreement against Auction Management, the property seller, and the auctioneer (defendant). Auction Management filed to stay proceedings and compel arbitration, claiming that the auction terms and arbitration clause governed the dispute. The district court denied the motion, and Auction Management appealed to the Third Circuit. The court affirmed the ruling, finding that the contract was adhesionary and lacked mutuality because the font was small, the form did not distinguish the arbitration clause, and the parties’ bargaining power was unequal. Auction Management appealed to the Louisiana Supreme Court.