Connie A. Nagrampa v. Mailcoups Inc. The American Arbitration Association

We must decide who determines whether an agreement containing an arbitration clause is unconscionable: the arbitrator or the court.

I

After working for more than seven years in the direct marketing field, Connie A. Nagrampa entered into an agreement with MailCoups, Inc., to operate one of the company’s mail-advertising franchises. The document that the parties signed includes a clause requiring the arbitration of any dispute “arising out of or relating to” the franchise agreement. The clause designates-Boston, Massachusetts, as the situs for any arbitration proceedings and provides that costs will be borne equally by each party. Nagrampa claims that the franchise agreement, which she received in the mail and returned to MailCoups with her signature, was non-negotiable, that she was not given a copy of the agreement for her own records, and that MailCoups did not inform her about the arbitration clause or the costs associated with arbitration.

Nagrampa’s mail-advertising franchise proved to be a financial failure, and after operating the business for two years, she unilaterally terminated the agreement in September 2000. MailCoups, which claimed that it was still owed $80,000 by…