Lou Chronowski Published in ABA's Franchise Law Journal

The Winter 2006 issue of Franchise Law Journal includes a bylined article ("Arcinaga v. General Motors Corp. Suggests Possible Expansion of Rights Regarding Arbitration Clauses Under ADDCA*)" in which Lou analyzes a 2005 case when a court from the Southern District of New York stayed a motor vehicle manufacturer's request for arbitration even though the arbitration clause in the contract was not found in a "motor vehicle franchise contract."

Lou notes that "dealers, manufacturers, and their respective lawyers should recognize that arbitration clauses in agreements between dealers and manufacturers that do not constitute the primary motor vehicle franchise contract may not be given effect, despite the strong public policy supporting arbitration clauses. If dealers and manufacturers want arbitration clauses to be given effect, they should place such arbitration clauses in agreements that are clearly separate from the motor vehicle franchise contract." But even then, there are no guarantees that arbitration will be allowed.

[* Automobile Dealer's Day in Court Act (ADDCA)]