Class 6 Notes

Threadgill V. Peabody


There is a Hierarchy in the evidence the court look to:
1. written intent
2. Evidentiary actions taken by the parties

ETC.

Should there be a methodic approach to dealing with the Intent of the parties in such cases?

Meyer v. State Farm Fire & Cas. Co.
A contract of adhesion does not mean that its terms are invalid.  There was no ambiguity in the appraisal provision.  Arbitration clauses are standard in insurance contracts therefore the adhesion contract is not unconscionable. 


This does not require that the Meyers understand this contract. They would need to go to arbitration first.


The constitutionally provided right is of knowing what is in the contract does not apply where it is up against the public policy of arbitration.
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Lauvetz v. Alaska Sales and Service d/b/a National Car Rental 


Rental car case: P rents car and buys D's Insurance, signs CDW. Damages car via drunk driving and D claims that this is not part of CDW. Trial Court concurs and P appeals.


Issue: Whether the purchaser of the damage waiver reasonably expected the waiver to be subject to any exclusions?

Holding: A consumer would not reasonably expect the damage waiver to be less than complete, REVERSED, REMANDED, for P

Rule: Customers are not bound to unknown terms which are beyond the range of reasonable expectation.

Court adopted Restatement § 211; this section establishes the general enforceability of the terms of standardized forms, without regard for whether the customer reads or understands those terms.  Reasonable expectations are those expectations a consumer would have after reading the form.  When offered the CDW, the bailee would reasonably expect this option, at the not inconsiderable rate of $ 8.95 per day, to relieve him of responsibility even if the damage were caused by his fault.  “we join the large number of courts who have refused to enforce damage waiver exclusions under a variety of circumstances.”


If there are terms that are beyond the reasonable expectations of the consumer, they are non-the-less bound by the contract based on Restatement § 211.
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