Arbitration Clause

 Large businesses tend to overpower smaller businesses with arbitration clauses in their agreements. Arbitration hearings are expensive and they do not offer all the protections courts do. There is little oversight by the State of arbitrators and sweetheart deals can easily evolve between arbitrators who regularly attend hearings. Arbitration hearings can be arbitrary and evolve into a popularity contest between the two parties based not on formal reasoning but emotional considerations. Businesses who have attended many arbitration hearings have honed their skills to a science and they have their case presented by a highly qualified lawyer. But, arbitrations lacks a certain oversight by the law and courts and players who meet often in hearings can develop a rapport that goes beyond what oversight would allow in civil proceedings. The customer is at a great disadvantage here. The bottom line is that the system can be played by savvy people leaving the "first time" consumer out in the cold. Old-fashioned court hearings have a quality and reliability about them that cannot be denied. What appears to be a highly civilized hearing nevertheless can be a sham given poor oversight. What appears to be fair is sometimes different from fairness in fact if bias and cronyism exist.

A fully ethical business would be forthright in pointing out the costs of signing an arbitration clause in a contract. Costs can run $2500 a day and the richer party can drag out the hearings interminably. An ethical businessperson who did not want to be backer by a charming and well-spoken client might also hesitate to sign. The professional contract of architects written by their professional organization will include such a clause. A real estate contract might have such a clause. And there are building contracts that often require arbitration in their contracts.

• Fatigue into Compliance
• Constructive Taking
• Forcing Arbitration as a condition of a contract. Here, only one party decides the terms of an agreement. Unbalanced Contracts.