Opinion ID: 2829241
Heading Depth: 2
Heading Rank: 5

Heading: Unconscionability in Light of the Texas Home Solicitation Act

Text: Finally, the homeowners argue that the arbitration is unconscionable because the parties will expend time, energy, and money needlessly going to arbitration when the arbitrator will find the contract—including the arbitration clause—void, sending the case back to court. 8 They assert that their contract with Olshan violated the Texas Home Solicitation Act (THSA), which would render the agreements, including the arbitration clauses, void. The alleged basis for violation of the THSA is Olshan’s failure to include in the agreements certain language regarding cancellation in at least 10-point boldfaced type, where the transactions occurred by personal solicitation outside Olshan’s place of business. Tex. Bus. & Com. Code §§ 601.002(a), .052, .053, .201. Further, the homeowners contend that there is no dispute over whether the contract violates the THSA, and the arbitrator will thus certainly find the contract void. 9 It is tempting to avoid the unnecessary costs that would accompany an allegedly unnecessary arbitration. But to do so requires the trial court to make a determination of issues relating to the contract generally, even if it seems clear that one party or the other will prevail. As the U.S. Supreme Court stated in Prima Paint Corp. v. Flood & Conklin Manufacturing Co. , when the parties have contracted for arbitration of their disputes, a trial court “may consider only issues relating to the making and performance of the agreement to arbitrate.” 388 U.S. 395, 404 (1967); see also Rent-A-Ctr., W., Inc. v. Jackson, 130 S. Ct. 2772, 2778 (2010); Buckeye Check Cashing, Inc. v. Cardegna , 546 U.S. 440, 445–46 (2006) (“[U] nless the challenge is to the arbitration clause itself, the issue of the contract’s validity is considered by the arbitrator in the first instance.”). There is no way to fashion a standard to determine whether arbitration is unnecessary without giving the trial court some discretion over issues relating to the making and performance of the contract generally—exactly what Prima Paint , and later Buckeye and Rent-A-Center , sought to avoid. Allowing courts to make this determination under an unconscionability analysis would provide an end run around the rule. While in some cases this “rule permits a court to enforce an arbitration agreement in a contract that the arbitrator later finds to be void[ ,] . . . it is equally true that [the opposite] approach permits a court to deny effect to an arbitration provision in a contract that the court later finds to be perfectly enforceable.” Buckeye , 546 U.S. at 448–49. This conundrum is solved with a rule that allocates such decisions to arbitration, which is consistent with the liberal policy favoring arbitration in the FAA, U.S. Supreme Court decisions, and decisions of this Court. The homeowners failed to provide legally sufficient evidence of the prohibitive cost of arbitration to prove unconscionability , and this failure cannot be remedied by allowing the trial court to determine if it believes the contract itself is void.