Nov 04, 2015

What Is This "Arbitration Thing" Buried In The Fine Print And Why Should I Care?

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From Marketplace.org, a four minute audio interview:

Americans accept contracts almost every day. Most recently it might have been on a computer — or on a phone for that matter. Netflix, AT&T, Starbucks— they all have them in one form or another. It seems you have to agree before you can do just about anything these days.

But according to Jessica Silver-Greenberg of The New York Times, there’s a good chance that contract will have a particular clause — usually nine words or so — that keeps your legal dispute in cheap, private arbitration instead of expensive court.

Questions:

  • What types of contracts typically have arbitration clauses?
  • Are arbitration clauses included in contracts good for consumers? Why or why not?
  • What are the characteristics of arbitration?
  • Why have companies been able to include these clauses in their contracts?

Here is the long-form NY Times investigation written by Jessica Silver-Greenberg which generated over 1,000 comments.  It’s lengthy but would be most interesting to your students interested in consumer law.

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Check out this NGPF Lesson on Reading Credit Card Fine Print

 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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