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The “fine print” and arbitration agreements

Posted by Scott M. Peterson | Jun 15, 2016 | 0 Comments

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How many times have you seen those words?  More to the point, how many times have you mindlessly clicked on the box?  Have you ever read the “fine print”?  Odds are overwhelming that the answer is no.

The “fine print”, unfortunately, is what will get us.  It constitutes the terms of the agreement, drafted by highly paid lawyers, that limits our rights.  Whether it's an agreement to use a website, rent a car, put a family member in a nursing home, or get a job, the fine print often contains language that takes away many legal rights that we may have had.  One of these is the right to a jury trial, and it's taken away by the arbitration agreement.

The Arbitration Agreement

Buried within many agreements is what is known as an “agreement to arbitrate.”  The agreement to arbitrate basically states that in the event that you have a dispute over the service provided, you will resolve that dispute through arbitration, rather than in court.

What Is Arbitration?

Arbitration is a process to resolve disputes where the parties submit proof (the facts) to a “neutral” third party (usually a lawyer), who then issues a decision.  Arbitration is a fairly streamlined process that eliminates much of the formality (and, often, the delay) of the legal civil jury trial system.  Arbitration, unlike mediation, tends to be binding on the parties.

So What's the Problem with Arbitration Agreements?

The problem with arbitration agreements – from a consumer perspective – is that large companies love them.  They allow them to save a lot of money on legal fees, and, as importantly, they remove the ability for the consumer to have a jury decide the case.

The removal of a jury can be very significant.  Juries tend to be more emotionally connected to a case, and can often make awards that exceed that which an arbitrator will award.  Plus, the right to a jury trial is a fundamental precept of the american justice system.

Not all arbitration agreements, however, are enforceable.  In some cases they are not written in an enforceable way, are not made clear enough to the consumer, or are otherwise not fair.  This is more rare than not, however, so the next time you click “accept”, just keep in mind some of the rights you are giving up.

If you have questions about consumer rights give us a call.  We're happy to help.

About the Author

Scott M. Peterson

Scott M. Peterson is the founding partner of D'Orazio Peterson, having left a partnership at a large regional law firm to limit his practice and focus on helping people protect their families.


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