Arbitration clauses are allowed because in contracts the tradition is that the parties are allowed to create private rules that will govern their future transaction. You can also nominate the venue and laws that will apply to the contract, even if you don't arbitrate.<p>The reasoning is that the contract is a bargained document between the parties, and if a party does not like the contract, they are not forced to enter it.<p>If what you get in return for the contract is not sufficient to join the contract, then you don't execute it.<p>This is efficient so long as the bargaining power in the market is not highly asymmetrical. The US market is not ideal, but I'm not entirely certain arbitration provisions are a bad idea, regardless.<p>One reason arbitration provisions might be good, is because its a way for companies to opt out of the hunting territory of the trial lawyers association. The lawyers are another powerful group that has created many kinds of nuisance lawsuits that act as a private tax on corporations in the US. If the private tax is unavoidable, the cost is passed on as a price increase to consumers.<p>The lack of arbitration clause could manifest itself as increased cost of goods in the current climate, because of the huge cost of nuisance class actions, etc.<p>Just a perspective.
It's difficult to understand how such clause is even legal to begin with. It basically sets up a "private" justice system for non criminal cases. That's insane. I get it, there are difference sort of tribunals. But it shouldn't be up to the corporations to decide where justice is supposed to be served.
For more information about arbitration courts, read this New York Times article:. <a href="http://mobile.nytimes.com/2015/11/01/business/dealbook/arbitration-everywhere-stacking-the-deck-of-justice.html" rel="nofollow">http://mobile.nytimes.com/2015/11/01/business/dealbook/arbit...</a>
I posted this on another article- <a href="https://news.ycombinator.com/item?id=11850870" rel="nofollow">https://news.ycombinator.com/item?id=11850870</a>
-but it went unanswered, I'm hoping maybe this time someone will see this. It was in regards to google being brought a CA by advertisers who'd felt cheated (and rightly so if I understand correctly).<p>"Serious question- Would this(a class action suit for screwing customers) have been possible if Google had put in their contract that all parties waive their right to a class action? Many companies do this now- Microsoft's xbox live, for example not only forces you to forfeit any class action lawsuits, but at the time I stopped using their services, I believe they also required meditation with a mediator to be chosen by Microsoft. I sold my xbox 360 and never looked back.<p>edit- I also remember specifically Microsoft releasing a TOU update just days after, if not the day of, the ruling allowing companies to do this came down."
Serious question: how is this legal? I can't imagine I could make someone sign a form that he waives his right to sue me and then shoot him, right? Assuming he doesn't die and it's him, not the government, that prosecutes/sues me.
Has any state attempted to ban arbitration clauses via popular vote/referendum? If so, would that even hold up in court and across state lines?<p>Seems like the only way to deal with this crap as there's no incentive for corporations <i>not</i> to force customers into binding arbitration. If I was still running a large consumer focused corporation I'd insist on it as well.
This isn't exactly rare. It's a very, very common clause in TOS's. It's also often a clause that isn't exactly enforceable (and I believe different venues have different rules about it).
Someone gave non-specific legal advice that a hackerspace I'm a part of include an arbitration clause in its liability waiver.<p>Comparing Google's to Comcast in this situation doesn't really feel right.
Does anybody care about the Constitution anymore? It seems like every day I read an article about someone either going against the Constitution, or getting very close to denying its importance in the United States.