The United States Supreme Court's recent decision in Direc TV, Inc. Imburgia upheld a binding arbitration clause in a consumer service agreement that included a waiver of class arbitration. Background Direc TV entered into a form service agreement with two respondent California residents that included a clause committing the parties to binding arbitration. Supreme Court's view of the supremacy of the Federal Arbitration Act and its application even in contracts nominally governed by state law.
The arbitration clause included a waiver of the parties' right to class arbitration, as long as the "laws of your state" did not make the class-arbitration waiver unenforceable.
It further provided that if the laws of the customer's state invalidated class-arbitration waivers, then the entire arbitration clause was also unenforceable. At the time Direc TV and respondents entered into the service agreement, class-arbitration waivers were unenforceable in California based on Discover Bank v. In so holding, the trial court cited the Discover Bank rule and found that its application to class-arbitration waivers invalidated the entire arbitration clause.
Cancellation denotes the situation where parties declare the cessation of obligations prematurely. Among other things, parties resort to cancellation when one or both of the parties fail to do what otherwise they ought to do, do what they ought not to do or when one fails to deliver what he/she has to deliver for different reasons.
What can be taken as one other effect of non- performance is cancellation of the contract.
If a contract has due to a typo or other error of the party a different content than intended, the contract is not binding without any changes, if the other party knew or had to have known of the mistake.
If the other party has not and should not have been aware of this so-called expression error, the agreement is valid and binding unchanged.Generally, the invalidity will be considered only, if it is referred by making an objection against the other party or bringing a legal action in court.On the other hand certain invalidity grounds will be taken into account ex officio without any need to refer on them. Rectification process may take place and the contract may become valid, for example, if the violated party subsequently accepts an invalid contract.For example, a form error in connection with a real estate sale will be taken into account ex officio and an application for the registration of title to property will be rejected. Invalidity may also be rectified, if the party does not refer to it within a reasonable period of time.However, all invalidity grounds may not be rectified.Businesspeople have a common belief that after entering into a contract, there are no exceptions to its enforcement and are otherwise free from issues.