'Volunteering' to Arbitrate Through Pre-Dispute Arbitration Clauses: The Average Consumer’s Experience
Arizona State University (ASU) - Sandra Day O'Connor College of Law
Deborah R. Hensler
Stanford Law School
Law & Contemporary Problems, Vol. 67, No. 55, 2004
Over the past several decades, the profile of arbitration has changed dramatically. Arbitration is no longer the province of sophisticated participants. Consumers who enter into contracts that substitute binding arbitration for the public court system may be required to arbitrate disputes that arise in the course of their relationships with service or product providers. The merits of this consumer arbitration jurisprudence have been debated heatedly by members of the judiciary, legal commentators, commercial interests, and public advocacy groups. Perhaps most central to the debate are concerns that consumers do not fully understand the terms of these agreements, and that, even if they did, they cannot negotiate those terms, which are offered on a "take-it-or-leave-it" basis. In accordance with the current arbitration jurisprudence, however, consumers are bound by the terms of these contracts unless their terms are deemed unconscionable or otherwise faulty under general principles of contract law.
The purpose of this Article is to help build the empirical foundation necessary for an informed debate regarding arbitration clauses in consumer contracts by providing preliminary insight into how businesses' use of these clauses affects consumers' ability to pursue their legal rights. To this end, the Article reports the results of a study investigating, in a wide variety of consumer purchases, the frequency with which the average consumer encounters arbitration clauses, the key provisions of these clauses, and the implications of these clauses for consumers who subsequently have disputes with the businesses they patronize.
Number of Pages in PDF File: 20
Keywords: consumer contracts, arbitration clause, dispute resolution
Date posted: May 29, 2009
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