In today's busy world, most of us have entered certain agreements that we don't even know about. For example, in virtually every utility contract (gas, water, electricity, phone) there is an Arbitration Clause which requires that you forego your right to sue the company, and agree instead to have any dispute arbitrated. This goes for many other business agreements as well, such as health insurance contracts, life insurance contracts, auto leasing contracts, furniture leasing, real estate contracts, credit card contracts and home loans, etc. You will also find such agreements in virtually every doctor's office and Hospital. Most people don't even know they are agreeing to the Arbitration Clause when they sign the contract. In fact, many people don't even know that they have signed a contract. Nearly every time you purchase something (e.g. a product or a service) on the internet, you are asked to review and agree to the terms of doing business with that company. And, you don't sign anything! Most people just click on the box that says, "I agree." How many of you actually read the five to ten page agreement?
Why do these Arbitration Clauses exist? Because it costs a company less money to go to arbitration than to fight a lawsuit. And, it limits your rights as a consumer to a trial (or even the use of Small Claims Court). An arbitration proceeding is like a mini trial. Instead of going to court, each side must agree to an arbitrator, who presides over a hearing much like a Judge presides over a trial. However, in an arbitration proceeding, there are usually limits on the amount and type of evidence you can produce and the number of witnesses you can call. Most arbitration hearings are completed in less than a few hours. And, arbitrations are usually binding, which means that you generally have no right to appeal the decision.
Knowledge is power! The first thing is to realize that these Clauses exist, and that you may have to deal with one sooner or later. If you do, you will need a good attorney to represent you at the arbitration hearing. I am both a mediator and an arbitrator, and I can be the arbitrator on your case, or represent you at an arbitration hearing. If you have any questions about this subject, you can call me at my contact information below.
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Thomas A. Grossman