More and more companies have been incorporating a mandatory arbitration clause into their contracts. Preoccupation with the purpose of the transaction often cause many consumers to overlook this important inclusion in the contracts they sign. And so many people sign away their legal rights because they ignored the fine print or did not fully understand the implication of an arbitration clause in a contract or agreement. Legal experts suggest that before signing a contract or agreement of any kind, it is important to be cognizant of whether or not there is an arbitration close embedded in the document. If you sign, you could be…
- Forced to arbitrate disputes.
- Relinquishing your right to a jury trial
- Limiting pre-hearing discovery
- Prohibiting a class action suit
- Disabling your ability to appeal any erroneous interpretations of the law by the defendant and their attorneys.
In addition to these disadvantages, some arbitration clauses bind consumers from disputing both current and past transactions.
Businesses however, are keenly aware of these provisions and the costs involved in dispute resolutions. As a result, there is an increasing number of companies and corporations that are utilizing the arbitration clause in their contracts and agreements. As such, most consumers who sign contracts with an arbitration clause do so without recognizing that they are relinquishing their legal protections. It is therefore up to the consumer to read the fine print and negotiate the terms of a contract if they do not wish to relinquish their legal right to utilize the court system.
What is an Arbitration Clause?
An arbitration clause is a provision or stipulation in an agreement or contract that binds parties in a contractual agreement to resolve their disputes through arbitration. The arbitration process primarily involves the giving of notice or the intent to file a statement of claim. This action is initiated once a claimant files a statement of claim that specifies the reason for the dispute and remedies requested. In cases where arbitration clauses are mandatory or binding, it usually represents an unfair advantage in favor of the company.
An arbitrator supplants a judge in that they hear and review evidence in order to decide whether the plaintiff is entitled to recover damages and, if so, how much the plaintiff will recover. Arbitrations are conducted in the presence of the plaintiff, defendant and their attorneys and could involve witnesses. In most instances, the arbitrator’s decision is put in writing and submitted to the parties and their attorneys.
In standard forms, the arbitration clause usually appears in most purchase agreements and billing statements. Arbitration clauses are typically found in consumer transactions with:
- credit card companies
- Telephone service providers,
- Car dealerships,
- Mobile home manufacturers, and
- Lending institutions.
Fighting Arbitration Clause
Applicable defenses may invalidate some contracts that contain an arbitration clause. A qualified personal injury attorney, through investigation may be able to show that the terms of the contract put the plaintiff at the mercy of the other by affording undue negotiating power to the defendant and eliminating any meaningful advantage to the claimant. In such cases a determination can be made as to whether the arbitration clause is enforceable. This typically apply in situations where a consumer signed an agreement or contract under duress, due to fraud or unreasonable conditions. This can prompt a decision by the court to modify or invalidate the arbitration clause.
The key to making a successful challenge against an arbitration clause is to establish that the contract is unconscionable. A qualified personal injury attorney, can show that there is substantial imbalance in bargaining power between the contracting parties if…
- one party had no meaningful choice as to the provision,
- the provision was hidden or concealed from the party; or
- the provision is one-sided or unfairly in favor of the stronger party
To address the unfair aspects of the arbitration clause based on the specifics of the case and the conditions under which the contract was signed, the argument must of necessity, be fact-specific with evidence based on contract formation and the intent and effect of the contract’s terms. Other recourse for the plaintiff is to negotiate the best settlement within the parameters of the arbitration clause.
To learn more about settling a personal injury claim with an arbitration clause or how to receive a fair settlement for your injuries please contact Lytal, Reiter, Smith, Ivey & Fronrath at 561) 655-1990 or visit our website.
About Lytal, Reiter, Smith, Ivey & Fronrath
Conveniently located in West Palm Beach for 27 years, Lytal, Reiter, Smith, Ivey & Fronrath, LLP concentrates in Personal Injury, Wrongful death, Medical Malpractice, Product Liability and Auto accidents. At Lytal, Reiter, Smith, Ivey & Fronrath, we specialize in helping victims and their families get fair compensation for injuries caused by the negligence or recklessness of others. Our main areas of practice include personal injury, wrongful death, auto accidents, product liability, medical malpractice, and premise liability. We provide each client with the highest quality representation from a top Florida accident and injury lawyer.
Lytal, Reiter, Smith, Ivey & Fronrath
515 N Flagler Dr, 10th Floor
West Palm Beach
Florida, FL 33401
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