Second District Invalidates Arbitration Agreement in Auto Sales Contract

Yesterday the Second District invalidated an arbitration agreement pre-printed on the back of an auto sales form contract.  Vargas v. SAI Monrovia B, Inc., No. B237257, __ Cal. App. 4th __ (2d Dist. June 4, 2013).  The Second District revisited its holding in Sanchez v. Valencia Holding Co., LLC, 201 Cal. App. 4th 74 (2012), review granted March 21, 2012, S199119.  In Sanchez the court held that a “Retail Installment Sale Contract” used to purchase an automobile is unconscionable and unenforceable.  In Vargas, the court again concluded that the identical sale contract does not require the arbitration of disputes between a purchaser and a car dealer because it is permeated by unconscionability.  You can read more here.