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Commerce & Industry Ins. Co. v. Bayer Corp.

Supreme Judicial Court of Massachusetts
742 N.E.2d 567 (2001)


Facts

Malden Mills and Bayer Corporation (Bayer) (defendant) entered into an agreement for the sale of nylon tow. The Malden Mills purchase order sent to Bayer contained an arbitration provision. The Bayer invoice sent to Malden Mills was silent regarding arbitration and expressly conditioned Malden Mills’ acceptance of any order on their acceptance of any additional or conflicting terms in the Bayer invoice. Following a fire destroying a Malden Mills building, the company’s insurers, Commerce and Industry Insurance Company (Commerce & Industry) (plaintiff) sued Bayer claiming that the nylon tow sold to Malden Mills by Bayer was the cause of the fire. Bayer argued that the Malden Mills arbitration provision applied to the dispute and additionally stated that Malden Mills should be equitably estopped from refusing to apply the arbitration provision. The trial court held that the arbitration provision was unenforceable and rejected Bayer’s argument that Malden Mills should be equitably estopped. Bayer appealed.

Rule of Law

Issue

Holding and Reasoning (Greaney, J.)

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