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The parties agree to settle any potential disputes over this contract through the process of arbitration. In particular, the disagreement will be resolved according to the United States Arbitration and Mediation Rules. The number of arbiters will range from one to three. These professionals will not be affiliated with the defendant or other manufacturing enterprises. Furthermore, the parties will go to arbitration only on a bilateral basis, and no class action suit will be allowed. The arbitration will take place in the county where the claimant lives. The outcome of the mediation can be debated only in those cases if there is evidence indicating the arbiter’s impartiality or the conflict of interests.
This clause is not intended for a particular company or an enterprise. It can be included in any contract signed by the seller of goods or services and the buyer. These provisions apply to the legal disputes that occur in the United States. It is not relevant to international trade.
Should consumer arbitration be mandatory in nature?
It should be noted that many modern businesses require customers to sign a mandatory arbitration agreement. It implies that a person cannot bring a dispute to the court. This strategy gradually becomes more widespread. In turn, one should discuss various implications of this approach, especially its impact on buyers and producers.
From consumers’ perspective, arbitration clauses should not be compulsory because these provisions considerably diminish the bargaining power of clients1. In particular, they are deprived of the opportunity to withstand their rights in court. This opportunity is particularly relevant to class actions that are often critical for eliminating the malpractices of businesses. These lawsuits help people protect their interests in a collective manner2.
Therefore, the practices of companies have been debated by many lawyers as well as consumer associations that object to this form of conflict resolution, especially if it is imposed on buyers3. However, arbitration clauses enable companies to minimize the costs of possible litigation. Additionally, businesses do not need to spend much time on this task. Furthermore, one should keep in mind that these economic agents have a right to sell a product on their terms4. Thus, consumers need to accept these requirements.
The clause that has been presented in this paper incorporates the so-called class action waiver. It necessitates buyers to settle disputes independently5. It should be mentioned that the use of these waivers is often criticized because customers can better promote their interests if they can cooperate closely with one another6. The problem is that companies try to prevent them from acting in this way. However, the Supreme Court ruled that the inclusion of this provision was a legitimate method of protecting the sellers. It is the detail that should be taken into account by both buyers and enterprises.
Overall, this approach can be very useful if arbiters can act in an impartial way. It is helpful for reducing the caseload of modern courts. Nevertheless, it is necessary to create mechanisms that can empower customers. Thus, the government should take various precautions. For instance, one should ensure that arbiters do not have a conflict of interests. This aspect has been mentioned in the clause presented in this paper. Apart from that, much attention should be paid to those cases when the malpractices of companies can endanger the health of the buyers.
Alexander Belohlavek, B2C Arbitration: Consumer Protection in Arbitration 9 (2012).
Christine Riefa, Consumer Protection and Online Auction Platforms: Towards a Safer Legal Framework 137 (2015).
Gary Born, International Commercial Arbitration:International and USA Spectscommentary and Materials 222 (2001).
Illias Bantekas, An Introduction to International Arbitration 264 (2015).
Roger, Miller Cengage Advantage Books: Fundamentals of Business Law: Summarized Cases 44 (2012).
Shahla Ali, Consumer Financial Dispute Resolution in a Comparative Context: Principles, Systems and Practice 10 (2013).
- Ilias Bantekas, An Introduction to International Arbitration 264 (2015).
- Alexander Belohlavek, B2C Arbitration: Consumer Protection in Arbitration 9 (2012).
- Christine Riefa, Consumer Protection, and Online Auction Platforms: Towards a Safer Legal Framework 137 (2015).
- Gary Born, International Commercial Arbitration: International and USA Spectscommentary and Materials 222 (2001).
- Roger, Miller Cengage Advantage Books: Fundamentals of Business Law: Summarized Cases 44 (2012).
- Shahla Ali, Consumer Financial Dispute Resolution in a Comparative Context: Principles, Systems and Practice 10 (2013).