Pearl River Delta Law

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“Forced” arbitration and standard contract terms

To promote Senator Franken’s Bill (Consumer Mobile Fairness Act of 2011), the American Senate held a hearing on October 13 with the title “Arbitration: Is It Fair When Forced?”.

As TED FRANK argues here, calling this kind of provision “forced” is misleading. It is clear that these are standard contract terms, or “contracts of adhesion”. Therefore, this type of clauses is as “unconscionable” as any other clauses. It makes no sense to presume that the consumer had no real knowledge of this clause, but had the chance to notice any other important clauses (for instance, regarding the price, penalty clauses, and so on…) Again, the problem focuses on assessing if the consumer had, in fact, the opportunity to know and understand each one of the clauses, regardless of their material content.


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