Ramos v. Westlake Services CA1/2

California Court of Appeal
242 Cal. App. 4th 674 (2015)

ELI5:

Rule of Law:

When a contract is negotiated in a foreign language and the seller provides a purported translation of the English-language contract, the buyer's reliance on that translation is reasonable. If the translation omits a material term, such as an arbitration clause, there is no mutual assent to that term, and the clause is void and unenforceable due to fraud in the execution.

Facts:

Alfredo Ramos, whose native language is Spanish, purchased a used automobile from Pena's Motors.
Negotiations for the vehicle purchase were conducted primarily in Spanish with a dealership employee.
At the time of the transaction, Pena's Motors provided Ramos with a purported Spanish translation of the sales contract.
Ramos signed the English version of the 'Conditional Sale Contract and Security Agreement,' which contained a detailed arbitration clause.
The Spanish version of the contract provided to Ramos at the point of sale did not contain an arbitration clause.
The topic of arbitration or alternative dispute resolution was never discussed during the negotiations.
Pena's Motors later assigned Ramos's contract to Westlake Services LLC.

Procedural Posture:

Alfredo Ramos sued Westlake Services LLC in a California trial court.
Westlake filed a motion to compel arbitration based on an arbitration clause in the English-language sales contract signed by Ramos.
The trial court denied Westlake's motion to compel arbitration.
Westlake, as the appellant, appealed the trial court's order to the California Court of Appeal. Ramos is the appellee.

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Issue:

Does a valid, enforceable arbitration agreement exist when a party who negotiates a contract primarily in Spanish signs an English version containing an arbitration clause, but is simultaneously provided with a Spanish translation by the seller that entirely omits that clause?

Opinions:

Majority - Miller, J.

No. A valid and enforceable arbitration agreement does not exist because there was a failure of mutual assent. The court applied the doctrine of fraud in the execution, which renders a contract term void when a party is deceived as to the nature of the agreement and does not know what they are signing. While a party is typically bound by a contract they sign, regardless of whether they have read it, an exception applies when their failure to know the terms is objectively reasonable. Here, Pena's Motors implicitly represented that the Spanish document was an accurate translation of the English contract. Ramos's reliance on this representation was reasonable, particularly in light of California Civil Code § 1632, which mandates such translations to protect consumers. By providing a translation that completely omitted the arbitration agreement, Pena's Motors deprived Ramos of a reasonable opportunity to learn of its existence and essential terms. Therefore, mutual assent as to the arbitration provision was lacking, making that specific clause void.

Analysis:

This decision establishes a significant protection for non-English-speaking consumers in contract formation, reinforcing that arbitration agreements are not immune from fundamental contract defenses like fraud. It carves out a crucial exception to the general rule that a party is bound by what they sign, holding that reliance on a misleading or incomplete translation provided by the other party can be deemed reasonable. The case sets a precedent that businesses providing translations under statutes like Cal. Civ. Code § 1632 are effectively warranting their accuracy, and an omission of a material term can lead to that term being voided for lack of mutual assent. This will likely make it more difficult for businesses to enforce terms against consumers who were misled by incomplete translations during multilingual transactions.

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