## Facts

- General Steel Corporation sold prefabricated steel buildings and used a preprinted contract form containing standard terms and conditions.
- The standard terms included a broad binding arbitration clause covering disputes “arising out of or relating to” the contract.
- Before signing, Collins physically struck through and completely marked out the arbitration paragraph on the face of the contract.
- Collins signed the contract as altered and paid a deposit.
- The transaction later failed, and Collins sued in Clay Circuit Court to recover the deposit.
- General Steel moved to compel arbitration, asserting the arbitration clause remained part of the contract despite Collins’s deletion.

## Issues

1. Whether a party who strikes an arbitration clause from a preprinted form before execution effectively rejects that term while accepting the remainder of the contract.
2. Whether the UCC or boilerplate “no modification except by signed writing” language renders the handwritten deletion ineffective, such that arbitration can be compelled.

## Decision

- The Kentucky Court of Appeals affirmed the order denying General Steel’s motion to compel arbitration.
- The court held Collins’s pre-execution deletion of the arbitration paragraph manifested non-assent, so the arbitration clause never became part of the agreement.
- The court rejected the argument that signing the remainder of the form waived Collins’s rejection of arbitration.
- The court concluded the contract could be enforced without arbitration because the arbitration term, though material, was not essential to forming the sales contract.

## Legal Principles

- Arbitration is enforceable only if the parties mutually assent to arbitrate; a conspicuous pre-signature deletion shows lack of assent.
- Striking a clause during formation defines the terms of the bargain and is not a post-formation “modification” subject to a separate-writing requirement.
- Under UCC-based contract-formation analysis, a sales contract may be valid without a dispute-resolution provision when the core sale terms are sufficiently definite.
- A “material” term may be excluded without preventing contract formation if it is not essential to consummating the transaction.

## Conclusion

Because Collins clearly deleted the arbitration clause before signing, no agreement to arbitrate was formed, and General Steel could not compel arbitration; the parties’ contract, if otherwise complete, could proceed without the arbitration provision.


General Steel Corp. v. Collins, 196 S.W.3d 18 (Ky. Ct. App. 2006)