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Full-Text Articles in Law
What Do Consumers Understand About Predispute Arbitration Agreements? An Empirical Investigation, Roseanna Sommers
What Do Consumers Understand About Predispute Arbitration Agreements? An Empirical Investigation, Roseanna Sommers
Articles
The results of a survey of 1,071 adults in the United States reveal that most consumers do not pay attention to, let alone understand, arbitration clauses in their everyday lives. The vast majority of survey respondents (over 97%) report having opened an account with a company that requires disputes to be submitted to binding arbitration (e.g., Netflix, Hulu, Cash App, a phone or cable company), yet most are unaware that they have, in fact, agreed to mandatory arbitration (also known as “forced arbitration”). Indeed, over 99% of respondents who think they have never entered into an arbitration agreement likely have …
Mandatory Arbitration In Consumer Finance And Investor Contracts, Michael S. Barr
Mandatory Arbitration In Consumer Finance And Investor Contracts, Michael S. Barr
Book Chapters
This chapter focuses on the use of mandatory pre-dispute arbitration clauses in a subset of consumer contracts – those involving consumer finance and investor products and services. Arbitration clauses are pervasive in financial contracts – for credit cards, bank accounts, auto loans, broker-dealer services, and many others. In the wake of the recent financial crisis, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank). Dodd-Frank authorises the new Consumer Financial Protection Bureau (CFPB) and the Securities and Exchange Commission (SEC) to prohibit or condition the use of arbitration clauses in consumer finance and investment contracts, …
Mandatory Arbitration In Consumer Finance And Investor Contracts, Michael S. Barr
Mandatory Arbitration In Consumer Finance And Investor Contracts, Michael S. Barr
Articles
Mandatory pre-dispute arbitration clauses are pervasive in consumer financial and investor contracts—for credit cards, bank accounts, auto loans, broker-dealer services, and many others. These clauses often ill serve households. Consumers are typically presented with contracts on a “take it or leave it” basis, with no ability to negotiate over terms. Arbitration provisions are often not clearly disclosed, and in any event are not salient for consumers, who do not focus on the importance of the provision in the event that a dispute over the contract later arises, and who may misforecast the likelihood of being in such a dispute. The …
Arbitration Costs And Forum Accessibility: Empirical Evidence, Christopher R. Drahozal
Arbitration Costs And Forum Accessibility: Empirical Evidence, Christopher R. Drahozal
University of Michigan Journal of Law Reform
In this Article, written for this symposium issue on "Empirical Studies of Mandatory Arbitration," I examine the available empirical evidence on these two questions. I take "mandatory arbitration" to refer to pre-dispute arbitration clauses in consumer and employment (and maybe franchise) contracts. Accordingly, I limit my consideration of the empirical evidence to those types of contracts. I do not discuss empirical studies of international arbitrations, which almost always arise out of agreements between commercial entities. Nor do I discuss empirical studies of court-annexed arbitrations, which may not derive from party agreement and do not ordinarily proceed to a binding award.
Arbitration's Summer Soldiers: An Empirical Study Of Arbitration Clauses In Consumer And Nonconsumer Contracts, Theodore Eisenberg, Geoffrey P. Miller, Emily Sherwin
Arbitration's Summer Soldiers: An Empirical Study Of Arbitration Clauses In Consumer And Nonconsumer Contracts, Theodore Eisenberg, Geoffrey P. Miller, Emily Sherwin
University of Michigan Journal of Law Reform
We provide the first study of varying use of arbitration clauses across contracts within the same firms. Using a sample of 26 consumer contracts and 164 nonconsumer contracts from large public corporations, we compared the use of arbitration clauses in firms' consumer and nonconsumer contracts. Over three-quarters of the consumer agreements provided for mandatory arbitration but less than 10% of the firms' material nonconsumer, nonemployment contracts included arbitration clauses. The absence of arbitration provisions in the vast majority of material contracts suggests that, ex ante, many firms value, even prefer, litigation over arbitration to resolve disputes with peers. Our data …
Default Rules In Sales And The Myth Of Contracting Out, James J. White
Default Rules In Sales And The Myth Of Contracting Out, James J. White
Articles
In this article, I trace the dispute in the courts and before the ALI and NCCUSL over the proper contract formation and interpretation default rules. In Part II, I consider the Gateway litigation. In Part III, I deal with UCITA and the revision to Article 2. In Part IV, I consider the merits of the competing default rules.