Arbitration Provisions: Little Darlings and Little Monsters

Abstract:     
This Article takes a new approach to resolving the growing tension between the Federal Arbitration Act (FAA) and the unconscionability doctrine. While arbitration provisions are favored under the FAA, they are viewed far more skeptically by courts applying unconscionability to refuse enforcement of one-sided arbitration provisions. This tension, which has increased dramatically in recent years, represents a major fault line in contract law. Jurisprudence and commentary on this issue have assumed that courts have the authority to apply the unconscionability doctrine to arbitration provisions. This Article refutes that assumption, taking the position that Congress, in passing the FAA, removed from the courts the power to use unconscionability to deny enforcement of arbitration provisions. This argument is based on the language and structure of the FAA, the FAA’s legislative history, commentary contemporaneous with the passage of the FAA, and the nature of unconscionability. To the extent it is necessary to protect vulnerable parties from one-sided arbitration provisions, judicial application of the unconscionability doctrine cannot be the solution. This Article suggests that the arbitration system itself may be capable of addressing any such overreaching.

Number of Pages in PDF File: 34

Keywords: arbitration, federal arbitration act, FAA, unconscionability, contracts

JEL Classification: K12

Accepted Paper Series