Court of Appeals Upholds Trial Court’s Refusal to Enforce Illusory and Unenforceable Arbitration Clause

November 4, 2020 by

In late September, just 14 days following oral argument, a three-judge panel of the Dallas Court of Appeals unanimously affirmed a Collin County District Court’s ruling that a multi-level marketing company could not force one of its distributors into arbitration because the clause upon which it relied was illusory and unenforceable. In the lawsuit filed by one of its distributors, Travel to Freedom, WorldVentures Marketing sought to dismiss the suit and compel arbitration based on an arbitration clause contained in the 2020 version of its representative agreement and policies and procedures. However, despite its claims that Travel to Freedom electronically agreed to be bound by same by “clicking through” its website, WorldVentures could not prove Travel to Freedom ever agreed to be bound by this version.

To the contrary, the only evidence before the court to establish that Travel to Freedom ever agreed to any arbitration clause with WorldVentures was in 2012. And, as the Court held, the arbitration provision in the 2012 version of WorldVentures’ representative agreement and policies and procedures was markedly different from the 2019 version such that the 2012 version was illusory and unenforceable under well-established SCOTX precedent.

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