Illiana Parker

8.21.19
Morales v. Sun Constructors, Inc.

Parties: Morales – Plaintiff (Appellee), Sun Constructors, Inc. – Defendant (Appellant)

Deciding Court: US Court of Appeals, Third Circuit
Date: December 20, 2006, Plaintiff filed suit.
Statement of the Case:
 Action by Plaintiff, against Defendant, on account of wrongful termination.
Procedural History:
 District Court concluded that the arbitration clause was unenforceable because Morales
did not assent to the clause.
 Appellate Court reverses the decision of the District Court and remand the case with
instructions to enter a stay pending arbitration.
Facts:
 Morales is employed by Sun which was governed by a signed agreement containing an
arbitration clause. Morales was terminated by Sun, and he filed a wrongful termination
suit in DC of the Virgin Islands.
 Sun moved to stay the proceedings pending arbitration, but DC denied.
o DC concluded the arbitration clause was unenforceable because Morales did not
assent to the clause.
 Morales says Sun needed him to start work, they were under pressure. He does not
understand but 85% of English but passes a written English test. Yet, during orientation
for the job, the agreement was discussed at length, in English, and the arbitration was
about one-half of the agreement.
 Sun argues that Morales is bound to the entire agreement even if he is ignorant to the
arbitration. Court of Appeals agrees and reverses decision of the District Court.
Issue:
 This case requires the court to determine whether an arbitration clause in an employment
agreement is enforceable where one party is ignorant of the language in which the
agreement is written.
Result on Appeal:
 Appellate Court reverses the decision of the District Court and remand the case with
instructions to enter a stay pending arbitration.
Holding:
 In the absence of fraud, the fact that and offeree cannot read, write, or speak, or
understand the English-language is immaterial to whether an English-language agreement
the offeree executes is enforceable.
Rule:
 Mutual assent is necessary for the formation of a contract, but acceptance is measured by
their outward expressions of assent.
Analysis:
 Morales is not claiming fraud and he is not alleging that Sun misrepresented the contents
of the arbitration clause; indeed, it comprised about one-half of the agreement. Therefore,
the agreement is considered enforceable.
 He had the responsibility to find out before manifesting his agreement, a party’s
accountability for knowledge of a contract’s terms is often called “duty to read.”
Illiana Parker
8.21.19