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1-800-GOT-JUNK? v. Superior Court (Cal. Ct. App. - Oct. 21, 2010)

By Shaun Martin

Okay, I admit it.  I was going to post something about this case even before I read it.  Because I loved the caption.  1-800-GOT-JUNK? v. Superior Court.  Love it.

Plus, in truth, I basically have to admit that fact.  I have nothing at all to say about the doctrine applied by the Court of Appeal, and I also agree with its result.  A franchise contract specifies that Washington law applies.  The franchisor is based in Vancouver, Canada -- just across the border.  That's reasonable, and we should enforce that choice of law provision.  That remains the case even though California's franchise law provides that parties can't waive the pro-franchisee provisions of California's law, as -- surprisingly, at least to me -- I learned that Washington law is even more protective of franchisees than is California.  Makes sense.

So I have no beef whatsoever here.

Nonetheless, I thought I'd at least mention that this is a somewhat weird case because guess who's arguing for the invalidity of the choice-of-law provision here?  The franchisor.  The party that drafted the contract, and the party that inserted the choice of law provision.  Pretty rare, huh?

Seems to me that, wholly apart from the doctrinal merits, there might be a problem there.  I think a party that drafts the contract -- largely a non-negotiable contract of adhesion, at that -- has a hugely uphill battle when it argues that choice-of-law provisions that it drafted are legally unenforceable.  For me, it wouldn't normally do for such a party to say:  "Well, we thought they might be unenforceable in California, and even said so in the franchise agreement."  Which 1-800-GOT-JUNK? indeed did here.  It'd be easy enough to say:  "Washington law applies except for franchisees in California, for whom California law applies."  But 1-800 didn't do that, and I imagine deliberately so.

When you purposefully create an ambiguity -- saying "Washington law applies, except maybe it doesn't" -- in situations in which clarity is easy, I think a reasonable interpretation is that you're trying to have it both ways, and leave open the possibility that in a different case, you'd indeed be arguing that Washington law applies, even for franchisees in California.  I don't like that.  If there's ambiguity, and you caused it, I don't think I'm going to be very sympathetic when you say that the contract that you drafted is illegal.  Which is yet another reason I'm happy with the result here.

But still.  Mostly I just like the caption.

Full post as published by California Appellate Report on October 21, 2010 (boomark / email).