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Can i legally sue Dealership for fraud with an arbitration clause in my contract

Chicago, IL |

I purchased a used car from a franchise dealership. Now i have discovered fraud was committed. without going to details, can i legally sue the dealership, and if any lawyer willing to take my case if i signed the retail contract that has an arbitration clause. I am in Illinois.

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Attorney answers 4


Maybe. The scope of the arbitration contract may be drafted narrowly, so you can sue(assuming you mean in a civil court) or it may be drafted broadly, sot hat a court would require you to arbitrate any dispute. The contract's dispute resolution provisions should spell out what you've agreed to do to resoilve any dispute. Note that forum selection clauses can be "mandatory, so a court will strictly enforce them, or "permissive," so the parties agree on more than one option of where to sue. Please see my Legal Guide on that subject linked below.

As for the strength of any fraud claim, you're going to have to take the contract you signed to a lawyer to review, and explain why you think there was fraud. Fraud is defined as an intentional misrepresentation of fact that you reasonably rely on and that damages you, and there's a lot of nuance in each of those elements that comprise that cause of action. If you've got a viable fruad claim, you may also be entitled to punitive, as well as compensatory, damages.

See a lawyer for help, this isn't a DIY job.

Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to any follow-up comments. If you want to hire me, please contact me. Otherwise, please don't expect a further response. We need an actual written agreement to form an attorney-client relationship. I'm only licensed in CA and you shouldn't rely on this answer, since each state has different laws, each situation is fact specific, and it's impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.


An attorney will have to review the arbitration clause to be sure, but most likely you are going to have to file your case in the designated arbitration forum. As far as whether a lawyer will be willing to take such a case, that will depend more on the strength of the fraud case, than it does on the fact that the case has to be arbtirated. Although the pressence of an arbitration clause is definitely something we consider when deciding whether to accept a case, most consumer lawyers will take a good car case involving arbitration clauses. My law firm has also noticed that many dealers would rather settle than pay the arbitration filing fees.

The above response is not intended to create, nor does it create either an attorney-client relationship or an ongoing duty to respond to questions. It is intended to be solely the educated opinion of the author and should not be relied upon as legal advice. The response given is based upon the limited facts provided by the inquiring person and additional or differing facts might change the response. Attorney is licensed to practice law only in the state of Illinois. Responses are answers to general legal questions and the inquiring party should consult a local attorney for specific answers and advice.


Some times these clauses that take away your right to a jury trial can be beat and sometimes they cannot. Often times it depends on the circumstances of how the clause arose and often it depends on the leanings on the Judge, which I hear are awfully conservative in Crook county. There are a number of folks who do this area of law in your neck of the woods. You can find them on the NACA website.

Good luck with it.


It is difficult to answer your question because, as you say, you do not go into details. The arbitration clause determines who has jurisdiction over what. If it is a broadly worded clause with language similar to "any dispute" or "all disputes between the parties" you will likely be bound to the arbitration clause.
Contrary to popular belief, there can be real advantages to arbitration over litigation. First, because it is a simplified process, it can cost much less to arbitrate than to litigate. Second, arbitration generally takes significantly less time to resolve a dispute than litigation; closure is important.
If you file with a reputable dispute resolution provider such as the American Arbitration Association or JAMS, you are likely to get a fair and neutral arbitrator--they are very careful about who they put on their panels. The arbitration clause may state a provider, so read it carefully.
As I have so little information, this is educational only, and should not be relied upon as legal advice. You should consider seeking advice from a lawyer.

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