Avoid Arbitration Clauses When Signing Contracts

Whether you are a student signing up to take a college course, or opening a new bank account, or signing a document authorizing a car repair, take the time to read what you are being asked to sign.

It is becoming increasingly common for Corporate America to rely on adhesion contracts to force people to accept mandatory binding arbitration. Such language often will bar you from filing a lawsuit in court which will prevent you from having a jury of your peers decide any dispute that may arise between the parties. Imposing mandatory arbitration on consumers, employees, and others, is primarily designed to eliminate the threat of a class action. While the class action process has occasionally been abused by consumer groups, the vast majority of the time, a class action is the only tried and true legal tool available to enable consumers to challenge unfair action by companies that often have a greater financial ability to hire lawyers and fight to prevent consumers from obtaining fair compensation. For example, the average cost to file a lawsuit is $200, but if you are forced into binding arbitration you will not only have to pay your lawyer, but you will have to pay the arbitrators, sometimes as much as thousands of dollars, and may even have to pay the corporation’s lawyers if you lose.


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