| Court: | Supreme Court of New York, Appellate Division |
| Facts: | Plaintiffs bought computers, and have problems with the terms of the warranty, which include an arbitration clause incorporating by reference some rules that are not readily available. |
| Posture: | Finding for the defendants at trial. |
| Issue: | Is the arbitration clause valid? |
| Holding: | No. Remanded to the court to designate an appropriate arbitrator. |
| Rule: | The FAA means that arbitration clauses are enforceable, but this one goes too far by basically preventing substantive arbitration: costs vastly exceed the price of the disagreement (i.e., the cost of a computer), and the rules are hidden. |
| Reasoning: | NY law requires both procedural and substantive unconscionability. We have those both here. |
| Dicta: | The purpose here is not to redress inequality between the parties, but rather to ensure that one party can't surprise the other with overly oppressive terms. |