Annika Krol 11470457 Business Law 210 Section 1 April 12 2016 Carnival Cruise Lines Inc V Shute 499 U S 585 1991 Facts The Plaintiff Shute purchased a ticket for a seven day cruise on the Tropicale a ship owned by the Defendant Carnival Cruise Lines through a Washington travel agent The face of the ticket contained the terms and conditions of the passage which included a forum selection clause that stated any litigation related to the cruise must be tired in Florida The ticket also contracts also contained a provision that no refunds were available once the ticket was purchased The cruise departed from Los Angeles sailed to Mexico and went back to Los Angles While the ship was in international waters Defendant Eulala Shute slipped on the deck mat and was injured Shute sued Carnival for damages in District Court in Washington Carnival moved for summary judgment due to the forum selection clause stating the clause in the tickets required Defendants to bring their suit in Florida Procedure The suit was first filed in Western District of Washington the Ninth Circuit refused to enforce the clause The cruise line then appealed to the United States Supreme Court Issues Whether the court should enforce a forum selection clause for forcing individuals to submit to jurisdiction in Florida state fundamentally unfair Holdings Yes The Supreme Court of the United states held that the Court of Appeals made an error in refusing the forum selection clause Reasoning The forum selection clauses contained in the form passage contracts are subject judicial scrutiny for fairness however if they are not lacking in fairness it will be enforced The Court must consider whether Carnival was in bad faith discouraging legitimate claims from its passengers or not Decision and Remedy The Court ruled that there was no evidence that Carnival Cruise set Florida as the forum means of discouraging cruise passengers from pursing their claims or acted in bad faith Carnival Cruise s headquarters are located in Florida and many of its cruises depart from there Thus the forum selection clause was ruled enforceable Gatton V T Mobile USA Inc Court of Appeals of California152 Cal App 4th 571 2007 Facts T Mobile is a cellular phone provider in California where the Plaintiffs in this case were subscribers to T Mobile Plaintiffs are or were subscribers to T Mobile All Plaintiffs singed the service agreement drafted by T Mobile The service agreement stated that by singing this agreement you acknowledge the Terms and Conditions and agree to be bound by them The plaintiffs challenged T Mobile s selling of locked handsets when they were unable to use them when they switched carriers The Plaintiffs also challenged the termination fee of 200 Under the terms of the agreement of T Mobile subscribers who terminate the service before the expiration of the agreement are subject to an early termination penalty of approximately 200 per telephone The plaintiffs filed a lawsuit on behalf of themselves and all similarly situated California residents for monetary relief to which they are statutorily entitled and challenged TMobiles practice of installing a locking device on handsets that prevents its subscribers from stitching cell phone providers without purchasing a new handset Procedure The Trial Court denied the defendants T Mobile s motion to compel arbitration holding that the arbitration clause was unconscionable because it denied class arbitration TMobile appealed to the Court of Appeals in California Issues Did T Mobile violate the states of unfair business statues based off of the companies early termination fees and sale of locked phones Another issue is whether the plaintiffs signature of T Mobiles contract exempts the company from prosecution This leads to the main issue if an arbitration clause is valid and enforceable when it is both procedurally and substantively unconscionable Holdings No The Trail court and the Court of Appeals in California denied the motion to compel arbitration Reasoning The arbitration clause is only valid unless there is a reason to revoke the contract A contract can be revoked if it is unconscionability procedural or substantive Procedural occurs when when there is oppression or surprise in the contract The contract clearly stated the consequences of leaving the service early therefor there was no surprise and the clause is not procedurally unconscionable Substantive exists when the contract is overly harsh or one sided However California law holds that any contract seeking to disclaim liability for fraudulent conduct is contrary to public policy The court held that any contract disclaiming a class relief found in an adhesion contract entered into by consumers and a large corporation is a contract disclaiming liability for fraudulent conduct As a result this case showed strong reason for substantive unconscionability but a low reason of procedural unconscionability This lead to sufficient evidence to revoke the contract and the decision of the trial court to deny arbitration was affirmed Decision and Remedy The arbitration clause is substantively unconscionable however it is not procedurally The arbitration clause is only valid and will not be enforced when the case is both procedurally and substantively unconscionable T Mobile argued that there was no evidence of procedural unconscionability and their contract was not oppressive As a result T Mobile s motion to compel arbitration was granted by the Court of Appeals in California