Morrison v. Amway , 49 F.Supp.2d 529 (1998)

Was Amway's arbitration agreement enforceable?

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The District Court held that Amway's arbitration clause was enforceable. Morrison represented a class of distributors that were disputing the method used to pay commissions on the sale of motivational and business building materials. Amway moved to stay the lawsuit, arguing that a valid and enforceable arbitration clause existed between the parties. The Court found that the arbitration agreement was not unconscionable because of the superior bargaining power of Amway. The court held that while superior bargaining power is an element in fining unconscionability, its presence is not dispositive. The court further reasoned that the parties were sophisticated business people who were aware of the consequences of agreeing to such an arbitration clause.

Full case and case summary also available online at: http://www.mlmlegal.com/legal-cases/Morrison_v_Amway-Dist-Ct.php

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Published In: Civil Procedure Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

Reference Info:Federal, 5th Circuit, Texas | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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