Case Brief: Welsh v. Lithia Vaudm, Inc. 895 N.W.2d 487

Case Brief
Student’s Name
Institutional Affiliation
Course
Date
Case Brief
Welsh v. Lithia Vaudm, Inc. 895 N.W.2d 487
* FACTS
Kent and Julie Welsh (Plaintiff) sued Lithia Volkswagen (Defendant) for failure to repair their car after the Welshes returned the vehicle following a check engine light activation. Volkswagen had included an arbitration clause in the invoice that Julie signed while paying for the initial. When the check engine light reappeared, the plaintiffs returned the car to the defendant and subsequently filed a suit. The defendant responded by filing for arbitration. The defendant argued that Julie had committed the Welshes to submit any disputes to arbitration. The Welshes responded by noting that their contract was formed during the first repairs through a phone conversation.
* JUDGEMENT
The trial court ruled that the arbitration clause was not part of the parties’ contract.
* LEGAL PRINCIPLE
* ISSUE
Whether the arbitration agreement that Julie signed through the invoice was valid.
* HOLDING
No
* REASONING (Ratio Decidendi)
* GENERAL ANALYSIS
The general common law on contract modification posits that an agreement to modify and an existing contract has to have some new (independent) consideration to be binding. Besides, many courts also enforce an agreement to modify an existing contract in the event that the modification emanated from unforeseen circumstances that a party might not reasonably have expected to have foreseen and that may have interfered with the performance of the party. Another instance in which the courts can enforce a fair modification is where the parties involved mutually agreed to terminate their original contract and enter a new one. Since contracts are created by the will of the parties, they can also be terminated in the same fashion.
* Applied Analysis
The Welshes case presents an excellent example of modification of contracts. In this case, the Welshes formed a contract with Lithia after January 14, 2015 when they agreed Lithia to repair the car. However, Lithia’s new contract that he presented to the plaintiff on March 16, 2015 serves as a modification of the previous contract. The defendant presented the new contract in form of an invoice, which meant that she did not give any consideration on the possibility...