Many California car dealers are using an arbitration agreement that uses type that makes it almost impossible to read. Outrageous! Yet OK says the California Court of Appeal in a 2-1 decision.

In a familiar sequence, an employee signed an arbitration agreement and later sued the employer, the employer moved to send the case to arbitration, and the employee claimed the agreement was unconscionable.

In California (as in most states) in order for an agreement to be found unconscionable there must be both procedural unconscionability (that is, the way the agreement was formed) and substantive unconscionability (that is, the actual terms contained in the agreement). One or the other alone is not enough.

In Fuentes v. Empire Nissan (Cal Ct App 04/21/2023) [PDF] the California Court of Appeal held (2-1) that the agreement was procedurally unconscionable but not substantively unconscionable. So the agreement is enforcable.

The DISSENT argued that the agreement was substantively unconscionable simply because it was so incredibly difficult to read. Here's how the dissent put it: "The print is so fine it is unreadable without magnification. See if you can read it without giving up."

The dissent's basic reasoning is that because of the difficulty in reading the agreement, the employer knows what it contains but the employee does not.