Dispute Resolution and Arbitration Commons^™

Interest As Damages, John Y. Gotanda, Thierry J. Sénéchal

Working Paper Series

In this article, we posit that when arbitral tribunals decide international disputes, they typically fail to fully compensate claimants for the loss of the use of their money. This failure occurs because they do not acknowledge that businesses typically invest in opportunities that pose a significantly greater risk than the risk reflected in such commonly used standards as U.S. T-bills and LIBOR rates. Claimants also must share the blame when they do not set out a well-constructed claim for interest as damages. However, even when claimants do so, tribunals often award damages at a statutory rate or at rate reflecting …

Consumer Harm Acts? An Economic Analysis Of Private Actions Under State Consumer Protection Acts, Henry N. Butler, Jason S. Johnston

Faculty Working Papers

State Consumer Protection Acts (CPAs) were adopted in the 1960s and 1970s to protect consumers from unfair and deceptive practices that would not be redressed but for the existence of the acts. In this sense, CPAs were designed to fill existing gaps in market, legal and regulatory protections of consumers. CPAs were designed to solve two simple economic problems: 1) individual consumers often do not have the incentive or means to pursue individual claims against mass marketers who engage in unfair and deceptive practices; and, 2) because of the difficulty of establishing elements of either common law fraud or breach …

Arguments In Favor Of The Triumph Of Arbitration, Thomas E. Carbonneau

Cardozo Journal of Conflict Resolution

Organized discussions among legal scholars rarely instigate roiling controversies. Truth be told, it is generally deemed an achievement to maintain a wakeful state during these enclaves. The Cardozo Journal of Conflict Resolution Conference gauging the future of arbitration was exceptional in a number of respects. The topics and presentations were invigorating. Several practitioners, in particular, delivered outstanding papers. The sponsoring student journal demonstrated nimble managerial skills. No stone of accommodation or convenience was left unturned for the participants. I was also very impressed with the young academic lawyers who are active in the area of arbitration. Their contribution and commentary …

Determining If Mandatory Arbitration Is “Fair”: Asymmetrically Held Information And The Role Of Mandatory Arbitration In Modulating Uninsurable Contract Risks, Paul B. Marrow

NYLS Law Review

No abstract provided.

Ica And The Writing Requirement: Following Modern Trends Towards Liberalization Or Are We Stuck In 1958?, Jack Graves

Scholarly Works

Article 7 of the Model Law was revised in 2006 to liberalize any requirements of form, consistent with modern commercial practices and modern legal trends reflected in national laws. To the extent adopted by national legislatures, either of the two available options under this revision will effectively eliminate any requirement of a “record of consent,” thus making arbitration agreements more easily enforceable in the adopting jurisdiction. However, any such revision of national laws on arbitration based on the revisions of Article 7 of the Model Law will not necessarily have any effect on enforcement of awards in other jurisdictions under …

Ascertaining The Parties' Intentions In Arbitral Design, George A. Bermann

Faculty Scholarship

Supreme Court case law teaches us that the federal interest in arbitration does not consist of enforcing agreements to arbitrate according to some sort of abstract or ideal arbitral model, but rather according to the particular arbitral model upon which the parties had agreed. This body of law is driven by the same notions of party autonomy that underlie the law of arbitration generally. That parties may agree to forego access to national courts in favor of arbitration is an initial manifestation of that attitude. By logical extension, the parties also enjoy extraordinary latitude in determining the features that "their" …

Class Action Arbitration, William H. Baker

Cardozo Journal of Conflict Resolution

Class action arbitrations are a relatively recent phenomenon in the United States, but the number of such arbitrations is expanding at a rapid rate. As of August 2008, the American Arbitration Association ("AAA") has administered 246 class action arbitrations and Judicial Arbitration and Mediation Services, Inc. ("JAMS"), another major U.S. arbitral institution, has also administered a substantial number of class arbitrations.

Challenging Class Action Bans In Mandatory Arbitration Clauses, F. Paul Bland Jr., Claire Prestel

Cardozo Journal of Conflict Resolution

After a brief summary of relevant Supreme Court doctrine, this article sets out the argument that exculpatory class action bans violate many states' generally applicable contract law and responds to several common corporate defenses offered in support of such bans.

Business Courts And The Future Of Arbitration, Christopher R. Drahozal

Cardozo Journal of Conflict Resolution

This article examines the extent to which competition from business courts is likely to impact the future of arbitration. Part II provides a brief overview of the growth of business courts in recent years. Part III sets out a structural comparison of arbitration with business courts, highlighting the similarities and differences between the two. Part IV provides empirical evidence on the relationship between the availability of business courts and the use of arbitration clauses. Overall, the evidence provides little indication that parties are switching from arbitration to business courts. The evidence is far from definitive, however, and highlights the need …

Judges Gone Wild: Why Breaking The Mediation Confidentiality Privilege For Acting In "Bad Faith" Should Be Reevaluated In Court-Ordered Mandatory Mediation, Samara Zimmerman

Cardozo Journal of Conflict Resolution

This Note focuses on the reasons why a good faith requirement or a bad faith exception for breaking mediation confidentiality is objectionable and offers an alternative for the Florida court system that, if implemented, could mitigate such disadvantages. I will discuss "the intersection between [a] court-ordered mediation, the confidentiality of which is mandated by law ... and the power of a court to control proceedings," and persons who appear before it by sanctioning conduct that taking place in mediation. Part II of this Note will begin by providing a background to the Doe v. Francis civil case. It will highlight …

Bargaining Power And Background Law, Nancy Kim

Faculty Scholarship

Power in contract law typically refers to the bargaining strength of each contracting party in relation to the other. In assessing the relative bargaining power of each party, courts and commentators often consider factors specific to the parties, such as socio-economic status and education level. In this Essay, I suggest another factor that affects the power of the parties in negotiating or modifying their agreement, one that I refer to as the "background law." The background law is the substantive law that governs the subject matter of the contract. This Essay focuses specifically on the background law of copyrights and …

Mandatory Arbitration For Customers But Not For Peers: A Study Of Arbitration Clauses In Consumer And Non-Consumer Contracts, Theodore Eisenberg, Geoffrey P. Miller, Emily Sherwin

Cornell Law Faculty Publications

We conducted a study of contractual practices by well-known firms marketing consumer products, comparing the firms' consumer contracts with contracts the same firms negotiated with business peers. The frequency of arbitration clauses in consumer contracts has been studied before, as has the frequency of arbitration clauses in non-consumer contracts. Our study is the first to compare the use of arbitration clauses within firms, in different contractual contexts.

The results are striking: in our sample, mandatory arbitration clauses appeared in more than three-quarters of consumer contracts and less than one tenth of non-consumer contracts (excluding employment contracts) negotiated by the same …

The Effective Reach Of Choice Of Law Agreements, Tiong Min Yeo

Research Collection Yong Pung How School Of Law

Two fundamental principles relating to party autonomy developed in the recent history of the conflict of laws. Despite initial reservations, the law today takes for granted that the parties’ agreement is nearly conclusive in respect of both their choice of litigation forum and their choice of the law governing the contractual relationship. Meanwhile, the law of obligations – in tort, restitution and equity – has grown apace; disputes between contracting parties today are rarely confined to pure contractual issues. Can contracting parties choose the law to govern non-contractual disputes in cross-border litigation? In the absence of such choice, to what …

Confronting Adr Agreements' Contract/No-Contract Conundrum With Good Faith, Amy J. Schmitz

Faculty Publications

This Article explores the intricate problem, or conundrum, of enforcing "Alternative Dispute Resolution ('ADR') agreements" that require mediation or other non-binding dispute resolution procedures. Although public policy supports ADR, courts' inadequate analysis of ADR agreements is threatening their vitality. Instead of properly considering the flexible nature of these agreements, courts assume formalist contract or no-contract conclusions similar to those they impose on what Professor Charles Knapp has termed "contracts to bargain." ADR agreements and other contracts to bargain pose enforcement problems because they require parties' cooperation without specifying what cooperation means or how to enforce such flexible duties. This Article …

State And Local Governments Address The Twin Challenges Of Climate Change And Energy Alternatives, Irma S. Russell, Jeffery S. Dennis

Faculty Works

No abstract provided.

How Bad Are Mandatory Arbitration Terms?, Omri Ben-Shahar

University of Michigan Journal of Law Reform

This symposium was presented in the 2008 Annual Meeting of the Contracts Section of the American Association of Law Schools. Indeed, studying the unconscionability of arbitration terms has become a standard feature of first-year contracts courses. This is perhaps one of the hotter topics in today's contract law and policy. Contractual rights, as they are enforced by contract law, might have substantially different values depending on the venue through which they can be vindicated. It is hard to predict how these values differ, but hopefully this symposium will inform some of these predictions.

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 …

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.

Litigation And The Optimal Combination Of Vague And Precise Clauses In Contracts, Alvaro E. Bustos

Faculty Working Papers

In this paper we determine the optimal combination of precise and vague clauses written in contracts when the parties face writing and enforcement costs, the second ones in the form of litigation. We show that the parties may prefer to write vague instead of precise clauses not only because they are cheaper to write but also because they are cheaper to enforce. We extend Battigalli and Maggi (2002) to model the decision of a principal who chooses clauses to describe the actions that an agent has to perform. As both players observe nature imperfectly they may call for a court …

"Arbitration As A Final Award: Challenges And Enforcement" Published As Chapter 10 In International Sales Law And Arbitration: Problems, Cases, And Commentary, Jack M. Graves, Joseph F. Morrissey

Scholarly Works

No abstract provided.

Mandating Minimum Quality In Mass Arbitration, Jeffrey W. Stempel

Scholarly Works

The Supreme Court's decision in McMahon and its progeny has led many businesses and employers to embrace what was once deemed a localized, industry-specific practice. The "new" or "mass arbitration" only mildly resembles the traditional system employed by niches in industry for settling commercial matters among commercial actors. While the "old" system involved parties who were relatively equal in bargaining power and knowledge, these systems for mass arbitration lack a freely entered bargain and resemble more closely, contracts of adhesion. Privatized arbitration resolves issues of both statutory and substantive law, and there is a strong argument, given the inexperience of …

Using The Unidroit Principles To Fill Gaps In The Cisg, John Y. Gotanda

Working Paper Series

The United Nations Convention on the International Sale of Goods (CISG) sets forth only a basic framework for the recovery of damages, thereby giving a court of tribunal broad authority to determine an aggrieved party’s loss based on circumstances of the particular case. Unfortunately, the lack of specificity has resulted in much litigation, and seemingly conflicting results. To remedy this problem, some have argued that the gaps in the CISG damages provisions should be filled with the UNIDROIT Principles of International Commercial Contracts. In this paper, I argue that the gap-filling rules of CISG preclude the UNIDROIT Principles from being …

Consideration Of 'Contracting Culture' In Enforcing Arbitration Provisions, Amy J. Schmitz

Faculty Publications

The Federal Arbitration Act mandates strict and uniform enforcement of standardized pre-dispute arbitration provisions. This may not be proper, however, in light of the importance of context with respect to these provisions. This Article therefore seeks to remind courts of the importance of exchange context by proposing a "contracting culture" continuum for enforcing these arbitration provisions that acknowledges the impacts of these provisions in a particular communal context. "Contracting culture" encompasses economic and non-economic relational factors that impact dispute resolution agreements, but go beyond common conceptions of "culture" focused on ethnicity, nationality, or religion. It also explores beyond the primary …

Dangers Of Deference To Form Arbitration Provisions, Amy J. Schmitz

Faculty Publications

This Article is part of my larger project exploring what I call "contracting culture," which borrows from legal realism and relational contract theory by considering contextual factors such as negotiators' relations, understandings, and values. As part of this project, I am pursuing various threads, including empirical studies of how contracting realities impact arbitration. In this Article, however, I focus on how these realities in business to consumer contracts combine with the Federal Arbitration Act and formulaic contract law to foster dangerous deference to form arbitration provisions. The Article then invites procedural reforms and offers suggestions for regulations aimed to temper …

Does International Arbitration Need A Mandatory Rules Method?, Alexander K.A. Greenawalt

Elisabeth Haub School of Law Faculty Publications

The role of mandatory rules in international arbitration remains a persistent source of debate. The basic problem is a straightforward one: contractual arbitration arises as a matter of the parties’ consent, but the resolution of contractual disputes can implicate mandatory rules of law that are not waivable and are typically designed to protect broader public rights. The literature has often presented the issue in terms of conflict between the authority of the state and the party-derived authority of the arbitrator. Asserting an independent public duty to protect national mandatory laws as well as the enforceability of arbitral awards, some writers …

Arbitration Of Nursing Home Claims: Oklahoma Goes Its Own Way, Stanley A. Leasure

Oklahoma Law Review

No abstract provided.

The Flight From Arbitration: An Empirical Study Of Ex Ante Arbitration Clauses In The Contracts Of Publicly Held Companies, Theodore Eisenberg, Geoffrey P. Miller

Cornell Law Faculty Publications

Informed parties bargaining for their mutual advantage will tend to agree to provisions that maximize the social surplus. Such bargaining includes provisions regarding the resolution of disputes that might arise under the contract. Thus, if a form of alternative dispute resolution, such as binding arbitration, provides greater social benefits than litigation, the dynamics of the process should tend to induce the parties to include a clause submitting future disputes to arbitration. This Article studies the actual contracting practices of large, sophisticated actors with respect to arbitration clauses. We examined over 2800 contracts, filed with the Securities Exchange Commission (SEC) in …

A Complete Property Right Amendment, John H. Ryskamp

ExpressO

The trend of the eminent domain reform and "Kelo plus" initiatives is toward a comprehensive Constitutional property right incorporating the elements of level of review, nature of government action, and extent of compensation. This article contains a draft amendment which reflects these concerns.

The Flight From Arbitration: An Empirical Study Of Ex Ante Arbitration Clauses In Publicly-Held Companies’ Contracts, Theodore Eisenberg, Geoffrey Miller

ExpressO

We study a data set of 2,858 contracts contained as exhibits in Form 8-K filings by reporting corporations over a six month period in 2002 for twelve types of contracts and a seven month period in 2002 for merger contracts. Because 8-K filings are required only for material events, these contracts likely are carefully negotiated by sophisticated parties who are well-informed about the contract terms. These contracts, therefore, provide evidence of efficient ex ante solutions to contracting problems. The vast majority of contracts did not require arbitration. Only about 11 percent of the contracts included binding arbitration clauses. The rate …

Explaining The Value Of Transactional Lawyering, Steven L. Schwarcz

ExpressO

This article attempts, empirically, to explain the value that lawyers add when acting as counsel to parties in business transactions. Contrary to existing scholarship, which is based mostly on theory, this article shows that transactional lawyers add value primarily by reducing regulatory costs, thereby challenging the reigning models of transactional lawyers as “transaction cost engineers” and “reputational intermediaries.” This new model not only helps inform contract theory but also reveals a profoundly different vision than existing models for the future of legal education and the profession.