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Binding pre-dispute arbitration provisions are nearly ubiquitous in consumer contracts. Most consumers do not even know that such provisions are in the lengthy boilerplate contracts presented to them by credit card companies, mobile phone providers, and manufacturers. Arbitration has statistically verified as a less favorable forum for consumers and a more favorable forum for large corporations by the Consumer Financial Protection Bureau.

Just as few consumers are aware of the existence of these arbitration provisions, they are also unaware that many of these provisions allow them to opt-out of arbitration. Big companies include the option to opt-out because they know that if very few customers aware of the arbitration, even fewer will attempt to opt-out.

Tesla’s vehicle purchase contract and warranty contain an arbitration provision that includes an opt-out option, which a consumer may utilize within 30 days of executing the purchase agreement:

You may opt-out of arbitration within 30 days after signing this Agreement by sending a letter to: Tesla, Inc.; P.O. Box 15430; Fremont, CA 94539-7970, stating your name, Vehicle Identification Number, and intent to opt-out of the arbitration provision. If you do not opt-out, this agreement to arbitrate overrides any different arbitration agreement between us, including any arbitration agreement in a lease or finance contract.

Often a Tesla is ordered online and delivery is taken sometime thereafter. This has lead to the confusion of many a Tesla consumer about when the 30 days starts. The purchase agreement may be deemed “signed” or executed electronically when the vehicle is ordered.

To be safe, because Tesla may argue signature occurred when a Tesla is ordered and not when it is delivered, it is important to opt-out of arbitration as soon as you order your new Tesla and receive a VIN. (Don’t worry, you can agree to arbitrate later if you like, but arbitration it is almost never the best option for the consumer.)

Conclusions

  • Tesla’s purchase agreement and warranty contain binding arbitration provisions.
  • The consumer can opt-out, but must do so promptly, often even before receiving their new Tesla, to protect their right to go to Court.
  • Download a Tesla Arbitration Opt-Out Form here.

For more information call the experienced trial attorneys at (833) 4MY-LEMON for a free case evaluation.

Disclaimer. The information provided in this post is for informational and educational purposes only regarding aspects of the California Lemon Law. It is intended for California Consumers only. This post is considered an advertisement by attorney Richard M. Wirtz and Wirtz Law APC. You should not rely on any of the information provided in this advertisement and no legal advice is given by the advertisement. No attorney-client relationship is established by viewing this advertisement. A written signed engagement agreement between you and Wirtz Law APC is required to create an attorney-client relationship. You should immediately consult an attorney which is experienced in California Lemon Law. Attorney Richard M. Wirtz is responsible for the content of this post.

  1. CFPB Arbitration Study 2015, Section 1.4.1.
  2. Id.at 1.4.2.
  3. Id. generally.
  4. Id. at 2.5.1.
  5. https://teslamotorsclub.com/tmc/threads/agreement-to-arbitrate.113003/

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