The contracts [the developer] presented to the homebuyers were difficult to read and the arbitration clause was on the back page.  The signature lines, in contrast, were on the front page.  Other than the fact that the paragraph headings relating to the arbitration provision were in bold capital letters, just like every other heading in the contracts, nothing drew attention to the arbitration provision.  To the contrary [unlike other provisions dealing with termites and drainage issues], the body of the arbitration clause was not capitalized.  Instead, it was in an extremely small font. Thus, even if an individual read the contract, there was nothing to draw the reader’s attention to the importance of the arbitration provision.  This failure to highlight the arbitration agreement, together with the representations made by [the developer’s] agent that these were standard provisions, are key features in the district court’s finding of procedural unconscionability. 

The court explained that an enforceable arbitration clause “must at least be conspicuous and clearly put a purchaser on notice that he or she is waiving important rights….” In the present case, the court noted that the arbitration provision was inconspicuous, downplayed by the developer’s representative, and failed to adequately advise an average person that important rights were being waived by agreeing to arbitrate any disputes under the contract.” In this manner, the court cleared the path for the homeowners to have their “day in court” to settle their grievances against the developer.
[PRINTER FRIENDLY VERSION]