A New Jersey appeals court has upheld an arbitration agreement and rejected a putative class-action suit against Toyota.

The two-judge panel, in a decision released Monday in Foti v. Toyota Motor Sales, upheld a trial judge's decision to dismiss the lawsuit and said the lead plaintiff, Regina Foti, clearly understood the language of the contract when she leased the car and agreed to arbitrate any dispute.

Appellate Division Judges Carmen Messano and Marianne Espinosa said the language in the sales contract was clear and conformed with state and federal rulings that have said arbitration—if agreed to by all parties—is the preferable way to resolve disputes.