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Reading notes

  • 8th Circuit takes a sensible view of ‘adhesion’ contracts (hat tip: MoFo)
    "In an action alleging that Chase improperly increased the interest rate charged on credit card balances, the Eighth Circuit reversed a finding that a class action waiver in a cardholder agreement was unconscionable. Cicle v. Chase Bank USA, No. 08-1362 (8th Cir. Oct. 6, 2009). The court was swayed by the fact that the arbitration clause specifically provided an exception to binding arbitration in that plaintiff could file her claim individually in small claims court. The court rejected an argument that the agreement was procedurally unconscionable because it was presented to the consumer on a take-it-or-leave-it basis. 'These sorts of take-it-or-leave-it agreements between businesses and consumers are used all the time in today’s business world. If they were deemed to be unconscionable and unenforceable contracts of adhesion, or if individual negotiation were required to make them enforceable, much of commerce would screech to a halt.' "
  • Carter’s sales reps’ secret deals with customers result in restatement of earnings, stock price drop, firings
    "Carter’s said the investigation found irregularities involving members of the company’s sales organization intentionally not disclosing accommodations arrangements with customers to Carter’s finance department and intentionally providing inaccurate documentation and explanations. As a result of the restatements for fiscal years 2004 through 2008 and the first six months of fiscal 2009, Carter’s will take a 3% reduction in earnings, or roughly $7.5 million. Carter’s said it has found 'control deficiencies' associated with its customer accommodations processes that 'constitute material weaknesses.' The company is 'actively engaged' in fixing the deficiencies and one fix has included firing certain employees."

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