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.