Representing Dealers now for several decades, one of the first things I always ask my client is “do you have an arbitration agreement.”  Personally, as an automotive dealer defense attorney I prefer Arbitration.  It is a more streamlined system, which stops a consumer attorney from lodging a costly and time-consuming fishing expedition.   All too often I see the plaintiff’s attorneys looking for ways to run up their billable time, with the hopes of collecting from the unwitting dealers.

So now you are saying to yourself, well yes, I do have an arbitration agreement in my deals.  Don’t breathe a sigh of relief yet.  Check your paperwork to make sure your employees are activating your agreements.   If there are not collecting the signatures, or filling out the paperwork properly, you may end up in Court, with no binding agreement.

Now is a good time to pull out a deal and have a look.  Is your arbitration agreement simply a clause to another one of your agreements or does it stand on its own?  Read the language in the agreement itself.  I recently dealt with an issue where my client had a free-standing arbitration agreement.  However, the Bill of Sale, signed by the customer had a box which stated, by checking the box the customer acknowledged there was an additional arbitration agreement.  This box was not checked.  Making the arbitration agreement useless.

Also, make sure that your arbitration agreement covers all the items related to the sales and financing of the vehicle.  Sometimes arbitration agreements may only be focused on protecting one aspect of the deal, for example financing.  The broader the scope, the more protection you will have.

Don’t be caught before it is too late, review your paperwork, know what your client is agreeing (or not agreeing to).  Train your staff to make sure that the boxes that need to be checked are, and that the agreements are signed.  This little extra attention to detail could possibly save you thousands of dollars and a lot of headaches down the road.