Lawyers drafting contracts and the people who “sign” or otherwise “accept” them should heed the facts in Knight v. Vivint Solar, __ N.J. Super. __, 2020 N.J. Super. LEXIS 240 (N.J. Super. Ct. App. Div. Dec. 2, 2020). At least two lessons are suggested: (a) When drafting, say it once and say it well, but do not over-commit to tech. (b) When entering a contract, all parties should have and maintain fully executed copies.
Knight concerned a long-term agreement to install solar panels on a home. When problems arose regarding payments, the homeowner sued and the merchant moved to compel arbitration under the provider contract. The parties presented the Law Division with conflicting stories regarding the customer’s agreeing to the contract by electronic signature on the salesman’s computer. The merchant explained its standard procedure for obtaining permissions to use electronic signatures, and the customer alleged that she had not seen or agreed to the terms. In particular, she denied agreeing to “check” a box next to a short statement by which she agreed to be bound by the arbitration clause a few pages earlier in the contract, which notably delegated arbitrability questions to the arbitrator. The Law Division ordered discovery regarding contract formation and eventually ordered arbitration of the contract formation issues in light of Goffe v. Foulke Management Corp., decided earlier that year. In Goffe, the Supreme Court confirmed the principle of severability of the arbitration clause from the contract in which it was contained and found that the parties may delegate to the arbitrator the question of whether the contract was formed, unless the formation of the arbitration clause itself is disputed.
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