Brower v. Gateway 2000, Inc.

Supreme Court of New York, Appellate Division676 N.Y.S.2d 569 (N.Y. Sup. 1998)

Facts

Brower et al. (plaintiffs) are consumers who purchased computers from Gateway 2000, Inc. (Gateway) (defendant) either by mail or telephone. When Brower et al. received their computers through the mail, the computers came with a “Standard Terms and Conditions Agreement.” The agreement provided that the consumers had 30 days to review the materials and if the computer was not returned within 30 days, the consumers were deemed to have accepted the terms and conditions. One of the terms was that any dispute arising out of the agreement was to be settled exclusively by arbitration through the International Chamber of Commerce (ICC). ICC arbitration involved an advance fee of $4,000, of which $2,000 was nonrefundable even if the claimant won. In addition, if the claimant lost, it would incur the cost of Gateway’s legal fees. Finally, the claimant was required to fly to Chicago at his own expense to take part in the arbitration. Brower et al. filed a class action suit against Gateway alleging deceptive sales practices. Gateway moved to dismiss the claim on the basis of the arbitration clause. The trial court granted Gateway’s motion. Brower et al. appealed.

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