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James v. McDonald's Corp. - 417 F.3d 672 (7th Cir. 2005)

Rule:

The Federal Arbitration Act (FAA) provides that a written provision in any contract to settle by arbitration any future controversy arising out of such contract shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C.S. § 2. The FAA was designed to reverse the long-standing judicial hostility to arbitration agreements and to place them on the same footing as other contracts. The FAA embodies a liberal federal policy favoring arbitration agreements. Any doubts with respect to arbitrability therefore should be resolved in favor of arbitration.

Facts:

Linda James alleged that the promoters induced her to purchase food products at McDonald's by the chance to win their contest when they knew that the odds of winning the game were less than represented and that they used a false pretense to refuse to honor her winning game card. The district court granted the promoters' motion to compel arbitration, which was based on an arbitration clause contained in the game's official rules, which were posted openly in participating restaurants. James failed to file a demand for arbitration and, instead, sought reconsideration, which was denied. Thereafter, the district court dismissed the case with prejudice for failure to prosecute. James appealed. She argued that the district court erred by ordering her to submit her claims to arbitration because she did not enter into a valid agreement to arbitrate her claims.

Issue:

Did the district court err in ordering James to submit her claims to arbitration?

Answer:

No

Conclusion:

The court disagreed, finding that arbitration was required pursuant to the Federal Arbitration Act, 9 U.S.C.S. § 2, because James, by participating in the game, agreed to follow its rules. She had the opportunity to read the contest rules and was bound by them even though she chose not to read them.

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