In DiMercurio V

question 33

Multiple Choice

In DiMercurio v.Sphere Drake Insurance,DiMercurio was a fisherman who worked on a boat in Massachusetts.The boat was insured by a British insurance company,Sphere Drake.The boat DiMercurio worked on sank and he was injured.The company he worked for could not pay the damages DiMercurio won against them in court but gave their rights against its insurer,Sphere Drake,to DiMercurio.The insurance policy between the boat owners and Sphere Drake included an arbitration clause.Sphere Drake sought to enforce the arbitration while DiMercurio argued that it would be too burdensome on the parties that he would have to travel to London for arbitration.The appellate court held that:

• A) the international travel was overly burdensome and the arbitration clause was not valid.
• B) DiMercurio did not agree to the arbitration clause with Sphere Drake, the boat owner did, therefore the arbitration clause is not valid.
• C) the arbitration clause is valid because arbitration clauses once agreed on are always valid.
• D) the arbitration clause is valid under a four-part analysis that included the consideration of the commercial relationship having a reasonable relation with a foreign country

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Definitions:

Licensed Vendors

Businesses or individuals who have been granted official permission to sell goods or services, often within a particular jurisdiction or for a specific product.

Economic Practice

A system or set of methods followed in the management and administration of economic affairs.

Price Difference

The disparity in the cost between two related goods, markets, or time periods.

Long-run Equilibrium

A state in which all factors of production and outputs are variable, leading to a situation where all firms in a market are making normal profit.