Kelker v. Geneva-Roth Ventures, Inc.
Annotate this CasePlaintiff submitted an online application for a payday loan with Geneva-Roth Ventures, which charged Plaintiff an interest rate of 780 percent APR. The loan agreement contained an arbitration clause. Plaintiff entered into the contract over the Internet and did not separately sign or initial the arbitration clause. Plaintiff brought a putative class action against Geneva-Roth for charging an interest rate higher than the thirty-six percent APR permitted by the Montana Consumer Loan act for payday loans. Geneva-Roth filed a motion to compel arbitration pursuant to the arbitration clause in the loan agreement. The district court denied the motion, determining that the arbitration clause was unenforceable. The Supreme Court affirmed, holding that the arbitration clause qualified as a contract of adhesion and fell outside Plaintiff's reasonable expectations. Therefore, the arbitration clause was unconscionable.
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