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Article
Preempting Justice through Binding Arbitration of Future Disputes: Mere Adhesion Contracts or a Trap for the Unwary Consumer
Loyola Consumer Law Reporter
  • Michael Z. Green, Texas A&M University School of Law
Document Type
Article
Publication Year
1993
Abstract

When individual consumers with little or no bargaining power have not consented to particular contractual terms, the use of the courts and judicial interpretations may be the only way to promote justice and allow consumers to protect themselves. Unfortunately, the trend, as established in recent United States Supreme Court decisions, is to apply the deferential standards of enforcement from commercial transactions to situations involving adhesion contracts between an individual consumer and a business entity where equal bargaining power is clearly lacking.

Perhaps the most pervasive example of this trend has been the Supreme Court's zealous enforcement of arbitration clauses under the Federal Arbitration Act ("FAA"). The increased use of arbitration, like many other forms of alternative dispute resolution ("ADR"), has become a preferred method for those who suggest that there might be "a better way" for resolving litigation disputes. Concerns over this country's "litigation explosion" may have fostered the growth of ADR; many foes of the litigation process are enrolling in the ADR movement." The proponents of ADR suggest that arbitration is a fast, effective means for resolving disputes without the delays and exorbitant costs of litigation. Because of these purported benefits, several jurists, scholars, and practitioners are joining the ADR ranks. As a result, many new firms and businesses are surfacing to take advantage of the big money involved in ADR services.

Section II of the Article defines the problem with adhesion agreements to arbitrate future consumer disputes. Section III of the Article provides a framework for analyzing these adhesion agreements and suggests appropriate responses to correct current problems in this area. Finally, this Article concludes that requiring knowing and voluntary consent to an arbitration clause is the only just method that gives both consumers and merchants a clear choice in determining the appropriate forum for resolving their disputes.

Disciplines
Citation Information
Michael Z. Green. "Preempting Justice through Binding Arbitration of Future Disputes: Mere Adhesion Contracts or a Trap for the Unwary Consumer" Loyola Consumer Law Reporter Vol. 5 (1993) p. 112
Available at: http://works.bepress.com/michael_z_green/29/