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Case Study: Baker v Osborne Development Corp.

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Case Study: Baker v Osborne Development Corp.
Case Study Unit 2
Baker v Osborne Development Corp.
Bonnie Leipold
LS311-37COBL Business Law
Kaplan University
March 12, 2013
In the case Baker v Osborne Development Corp., Baker would be able to sue the builder since
the court ruled the contract ambiguous. This was because at one point the contract read, “shall
be decided by the arbitrator” and another point in the same section the contract read, to be
determined by the arbitrator or by any court.” The arbitration agreement was procedurally and
substantively unconscionable, since the arbitration agreement was not included in any contract
between the buyer and the builder. The arbitration agreement was contained in a separate
document that the buyers were not asked to sign at the time of the property was purchased. The
court found substantive unconscionably because it would be very unlikely for the builder to sue
the buyer. Arbitration has become more known for court cases today. Arbitration not only avoids
cost and delays for litigation but it puts the dispute in front of the arbitrator who has the expertise
to understand the case. States such as New York, New Jersey have consistently enforced
arbitration of disputes governed by the FAA. (Berardo & Clemens, 2012) The NCR Corporation
v Korala Associates LTD case said in enforcing a valid arbitration clause the courts must look at
the entire contract to determine what goes to arbitration or goes to court. This case had many
possible arbitration situations; two of them involved Korala obtaining software owned by NCR,
APTRA XFS and S4i. Since only the APTRA XFS was included in the contract, only the
situation involving the APTRA XFS software was sent to arbitration by the courts. The issue with
S4i software would have to be taken to court. This is also the case with Baker v Osborne
Development Corp., The original contract did not include the arbitration clause in question and
the buyers were allowed to sue the development company.
References
Baker v Osborne Development Corp., 159 Cal.App.4th 884,71CalRptr.3d854 (2008) Miller, R., &
Jentez, G. (2010). The legal and constitutional envionment of business. In R. Dewey (Ed.),
Fundamentals of business law : Summarized cases (8th ed., pp. 90-91). Mason, OH: South-
West Centgage Learning.

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 Case Study: Baker v Osborne Development Corp. Case Study Unit 2 Baker v Osborne Development Corp. Bonnie Leipold LS311-37COBL Business Law Kaplan University March 12, 2013 In the case Baker v Osborne Development Corp., Baker would be able to sue the builder since the court ruled the contract ambiguous. This was because at one point the contract read, “shall be decided by the arbitrator” and another point in the same section the contract read, to be determined by the arbitrator or by any court.” The arbitration agreement was procedurally and substantively unconscionable, since th ...
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