Arbitration Clauses: The Louisiana Supreme Courtts Flawed Decision in Duhon v. Activelaf, LLC. And Why the Doctrine of Unconscionability Should Be Adopted in Louisiana

Abstract

Louisiana should give credit where credit is due and recognize the doctrine of unconscionability. Louisiana is the only civil law jurisdiction in the United States. In order to preserve its unique heritage, Louisiana has been reluctant to adopt common law concepts. Because of this reluctance, some beneficial concepts have been rejected or overlooked, such as the doctrine of unconscionability. Common law states use the doctrine of unconscionability to analyze contracts of adhesion, or determine the enforceability of arbitration clauses. Louisiana, on the other hand, utilizes a four-factor test outlined in Aguillard v. Auction Management Corp. The four factors are: (1) the physical characteristics of the arbitration clause, (2) the distinguished features of the arbitration clause, (3) the mutuality of the arbitration clause, and (4) the relative bargaining strength of the parties. The Louisiana Supreme Court used these factors in its decision of Duhon v. Activelaf, LLC. The court failed to use all of the factors and conducted a faulty analysis. This Article discusses how an analysis of all four leads to the conclusion that the disputed arbitration contract is not adhesionary and is valid. This Article also discusses how the doctrine of unconscionability is quite compatible with the Louisiana Civil Code. The doctrine helps fill in the gaps of existing law, which is inadequate when dealing with mass, standard-form contracting.