Warehouse Clubs Should Consider Arbitration for Member Disputes

In the age of online retail and grocery shopping, many people still join warehouse clubs for additional savings. As part of their warehouse memberships, customers may agree to certain terms, including their willingness to arbitrate and forego filing a lawsuit when a dispute arises.

In Century Plastics, LLC v Frimo, Inc, unpublished opinion of the Michigan Court of Appeals, issued Jan. 30 (Docket No. 347535), 2020 WL 504977, the appellate court affirmed the circuit court’s granting of summary disposition for the defendant on the basis that the parties had an agreement to arbitrate.

“Defendant having incorporated the General Terms into the parties’ contract, under the unambiguous language of this provision, defendant had the power to compel arbitration of disputes arising under the contract. Plaintiff assented to the terms of the price quotation, and it did not raise any concerns” as to the applicability of the General Terms.

In light of this decision, warehouse clubs should review their terms and conditions and consider whether to remove a lawsuit from an unfavorable, plaintiff-friendly venue and place it into arbitration, where the fact-finder arbitrator may be more well-informed as to the law and can then apply that knowledge to the facts of whatever dispute arises between the parties.

As Benjamin Franklin said, “When will mankind be convinced and agree to settle their difficulties by arbitration?” With more and more stories of runaway juries, that time may be now.

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