Doctor’s Associates v. Casarotto
United States Supreme Court
517 U.S. 681 (1996)
- Written by Angela Patrick, JD
Facts
Paul Casarotto (plaintiff) signed a franchise agreement with Doctor’s Associates, Inc. (DAI) (defendant) that allowed Casarotto to operate a Subway sandwich shop. The two parties had a disagreement about the franchise agreement, and Casarotto sued DAI in Montana state court. However, the franchise agreement contained a clause requiring private arbitration of any disputes regarding the agreement. Citing this clause, DAI moved to stay the lawsuit and to force Casarotto to arbitrate the dispute instead. Montana had a state law that arbitration clauses were enforceable only if the front page of the contract gave notice of the arbitration in underlined, capital letters. Because the franchise agreement did not have this notice, the Montana courts followed the state law and refused to enforce the arbitration clause. The United States Supreme Court accepted review of the Montana Supreme Court’s ruling that the arbitration clause was not enforceable.
Rule of Law
Issue
Holding and Reasoning (Ginsburg, J.)
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