Sharp  Thinking

No. 195   Perspectives on Developments in the Law from Sharp-Hundley, P.C.   April 2021

Foul Ball Results In Primer On Unconscionability

By John T. Hundley, Sharp Thinking Editor

Foul ball hits baseball fan in face.

She sues.

 

Major League Baseball and Chicago Cubs invoke arbitration clause.

Court rules clause is unenforceable as unconscionable.

Zuniga v. Major League Baseball, 2021 IL App (1st) 201264.

That’s the essence of this case handed down by the Appellate Court in Chicago last month – but this decision also offers much more.  Indeed, in one place it offers a primer on unconscionability issues, particularly procedural unconscionability.

In Zuniga, MLB and the Cubs sought to compel arbitration based on an eight-paragraph arbitration provision available on the Cubs’ website and summarized in four-point type on the back of the event ticket.  Based in part on the practical inability of a ticket purchaser to access the website due to the commotion in which the typical fan purchases and then presents the ticket at the ballpark, the court rejected that attempt.

Most of the case deals with the concept of procedural unconscionability.  “Procedural unconscion-ability exists when a contract term is so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware that he or she was agreeing to it,” the court explained.

“Procedural unconscionability consists of some impropriety during the process of forming the contract depriving a party of a meaningful choice.  Factors to be considered are all the circumstances surrounding the transaction including the manner in which the contract was entered into, whether each party had a reasonable opportunity to understand the terms of the contract, and whether important terms were hidden in a maze of fine print; both the conspicuousness of the clause and the negotiations relating to it are important, albeit not conclusive factors in determining the issue of unconscionability,” it said.  “Factors making a court more likely to find unconscionability include the involvement of a consumer, a disparity in bargaining power, and the presence of the . . . term on a preprinted form.”

However, the use of a preprinted form as an adhesion contract is not enough.  “[T]here must be ‘(s)ome added coercion or overreaching’”, the court said.  “An arbitration clause that is difficult to find or hidden in a maze of fine print may still be considered part of the parties’ bargain if it is brought to the consumer’s attention, either elsewhere in the contract or by other means.”

In cases where procedural unconscionability has been found, “there was some factor that made the relevant contract term difficult or onerous for the non-drafting party to find or obtain at the time of contracting, such that it could not fairly be said that the non-drafting party to the contract was aware of what he or she was agreeing to,” it observed.

The court found those criteria met.  While the 4½-page arbitration clause on the website was mentioned in a 50-word summary on the back of the ticket, “nothing about this notice draws a ticket-holder’s attention specifically to the fact that he or she is agreeing to give up important legal rights by using the ticket ***.  Instead, the totality of the circumstances makes this appear as more of an effort to ‘impose the onerous terms of one’s carefully drawn printed document on an unsuspecting contractual partner.’”

“[P]resenting a paper baseball ticket to be scanned so that she could gain entry to Wrigley Field . . . is not a traditional method of forming a contract, and it is not an act that would necessarily cause a reasonable consumer to realize that he or she was agreeing to the terms and conditions of a contract.”

The court distinguished situations in which the consumer is required to indicate awareness of the terms and conditions, such as by clicking on a statement that she has had the opportunity to read them.

While the court said it could decide the case based on procedural unconscionability alone, it also found “a degree of substantive unconscionability.”  “Substantive unconscionability concerns the actual terms of the contract and examines the relative fairness of the obligations assumed,” the court noted.  In Zuniga, the offensive clause gave the ticket purchaser only seven days in which to opt out of the arbitration process (and the plaintiff had spent most of those days in a hospital).  In addition, to opt out the ticketholder had to have an account with the Cubs, and the plaintiff did not.  The court found “a degree” of substantive unconscionability in that the clause “allows an injured person an unreasonably short period of only seven days to opt out of arbitration and requires that a ticketholder ‘must’ include an account number in the request to opt out.”

Court Clarifies Duties In Non-Solicitation Agreements

A valid non-solicitation agreement does not prevent the promisor from accepting business that comes to it without its solicitation, the Appellate Court for the Third District has ruled.

Acting in Quality Transp. Servs., Inc. v. Mark Thompson Trucking, Inc., 2021 IL App (3d) 190489, the court dealt with a trucker which had a contract with a transportation broker and was solicited for direct business by one of the broker’s customers.  Though the customer’s solicitation resulted in a bidding process between the trucker and the customer, the court said that did not amount to unlawful solicitation.

“Whether a particular client contact constitutes a solicitation depends upon the method employed and the intent of the solicitor to target a specific client in need of his services,” the court said.  “Thompson submitted each bid to [the customer] only after she had requested that he did so.  Thus, we cannot conclude that Thompson targeted [the customer] with his bidding.”

The broker argued that in responding to the customer’s inquiries, the trucker made “an attempt or effort to obtain business” from the customer in violation of the agreement.  The court disagreed.

“An agreement restricting competition between parties ‘is reasonable only if the (agreement): (1) is no greater than is required for the protection of a legitimate business interest ***; (2) does not impose undue hardship on the (promisor), and (3) is not injurious to the public’,” it said, quoting Reliable Fire Equip. Co. v. Arredondo, 2011 IL 111871.  “While [the broker] may protect its legitimate business interest by prohibiting [the trucker] from ‘taking affirmative measures’ to obtain business away from [the broker], it cannot prohibit [the trucker] from developing prospective business opportunity that came their [sic] way through no fault of theirs [sic].  To hold otherwise would be contrary to public policy.”