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Case Citations [i] (Fall 2025)

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                             THE AMERICAN


                             LAW INSTITUTE



                                      Fall 2025 Citations



                      CONSUMER CONTRACTS



§ 2. Adoption of Standard Contract Terms

S.D.N.Y.2024. Rptr's Note quot. in sup. (citing Rptr's Note to § 2 of T.D. No. 2, 2022, which is now
Rptr's Note to § 2 of the Official Text). Terminated employees, who had commenced arbitrations
against employer pursuant to the parties' dispute-resolution agreements, sued employer, seeking to
compel it to pay for the arbitrations under the arbitration service's rules, which required an employer to
pay for arbitration with an employee if the employee was required to sign an arbitration agreement as a
condition of employment. Granting employees' motion to compel, this court ordered employer to pay
the ongoing fees for the arbitrations. The court rejected employer's argument that the arbitration
service's rule did not apply because employees were able to opt out of the dispute-resolution
agreements, citing Restatement of Consumer Contracts § 2 in explaining that people rarely read standard
contract terms, and that it was reasonable for the arbitration service to conclude that employees' right to
opt out of arbitration had little practical effect. Frazier v. X Corp, 739 F.Supp.3d 219, 230.

S.D.N.Y.2024. Com.  (1) and Rptr's Note quot. in sup. (quoting § 2 of T.D. No. 2, 2022, which is now §
2 of the Official Text). Michigan homeowners filed a class action against New York-based seller of
electricity and natural gas to consumers in deregulated energy markets, alleging that it engaged in
deceptive and unlawful pricing practices by falsely representing how the prices actually charged were
calculated. This court granted seller's motion to compel arbitration pursuant to an arbitration provision
contained in the parties' digital contract, holding that the parties entered a valid agreement to arbitrate.
Although the Michigan Supreme Court had not yet addressed contract formation in the context of digital
consumer contracts, a substantial body of state and federal case law had developed on the subject, and
the court assumed that the Michigan Supreme Court would likely follow that precedent, noting that,
according to Restatement of the Law, Consumer Contracts § 2, state and federal court decisions had
converged on the same minimum  requirements for digital consumer contract formation, with almost no
exception. Smith v. RPA Energy, Inc., 732 F.Supp.3d 278, 284-285, 287.

§ 3. Adoption of a Modification of Standard Contract Terms

C.A.9, 2024. Cit. and adopted in case quot. in sup. (T.D. No. 2, 2022, which is now § 3 of the Official
Text). Independent contractors and marketing corporation sued multi-level marketing company, seeking

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          For earlier citations, see the Appendices, Supplements, or Pocket Parts, if any, that correspond to the subject matter under examination.