Existence Of Arbitration Agreement Flops For Failure To Successfully Incorporate By Reference

An Agreement Need Not Expressly Provide For Arbitration But May Do So In A Document Incorporated By Reference.

        Petersen-Dean appealed from denial of its petition to compel arbitration.  The central question on appeal was "whether the mention of the warranty in the contract incorporated the warranty, with its arbitration clause, into the contract."  Cirile v. Petersen-Dean, Inc., B278075 (2/7  2/6/18) (Zelon, Segal, Bensinger) (unpublished).  The Court of Appeal explained that the warranty was not listed among the documents incorporated by reference, the contract language was "amorphous" and the contract language "did not guide the reader to the warranty as a source of terms incorporated into the contract."  Judgment affirmed.

        COMMENT:  A successful incorporation by reference should be conspicuous, specific, clear, and unambiguous.

        Perhaps the Court of Appeal was also irked by a lack of candor, for Justice Zelon wrote:  "In its petition to compel arbitration, Petersen-Dean did not disclose to the court that the arbitration provision was not set forth in the contract the parties signed in June 2014 but was contained in the owner's manual provided after the system had been installed."