Is clicking “I agree” a ticking timebomb?
In the digital age, the seemingly innocuous act of clicking “I agree” on a terms and conditions agreement can have far-reaching implications for our legal rights. This is particularly true when it comes to arbitration clauses, which can significantly limit consumers’ ability to seek justice. A recent Florida wrongful death lawsuit involving Disney highlights the potential consequences of “blindly” accepting such terms, though it’s important to note that this case is not a guarantee against future attempts to enforce arbitration clauses.
The Disney Case: A Cautionary Tale
Disney initially sought to force a grieving family into arbitration based on the deceased woman’s Disney+ subscription agreement. This decision, which was widely criticized for its insensitivity and exploitation of a tragic situation, sparked significant public backlash. Ultimately, Disney reversed course and agreed to let the case proceed in court.
In the news
While Disney’s decision to abandon arbitration in this case is a positive development, it’s crucial to recognize that it was a voluntary choice, in this particular case. There’s no guarantee that future defendants will follow suit. In fact, it’s possible that a court could rule in favor of enforcing arbitration clauses, whether it be Disney or other defendants finding themselves in similar contractual circumstances with a plaintiff.
It’s so convenient.
Imagine a hypothetical situation in which you slip on some liquid inside of a Walmart store and you sue Walmart for the negligent condition. Let’s also pretend that you had signed up for Walmart+ for the cool convenience of grocery pickup or delivery? Sound familiar so far? What would prevent Walmart from seeking to enforce the binding arbitration clause found in its terms of use agreement? Nothing but its good graces, because Walmart’s arbitration clause is written so broadly that it would unquestionably apply to slipping on some liquid that should have been mopped up:
EXCEPT FOR DISPUTES THAT QUALIFY FOR SMALL CLAIMS COURT, YOU AGREE THAT ALL DISPUTES ARISING OUT OF OR RELATED TO THESE TERMS OF USE OR ANY ASPECT OF THE RELATIONSHIP BETWEEN YOU AND WALMART, INCLUDING ANY PRODUCTS OR SERVICES OFFERED OR SOLD BY WALMART OR THE WALMART ENTITIES, WHETHER BASED IN CONTRACT, TORT, STATUTE, FRAUD, MISREPRESENTATION, OR ANY OTHER LEGAL THEORY, WILL BE RESOLVED THROUGH FINAL AND BINDING ARBITRATION BEFORE A SINGLE NEUTRAL ARBITRATOR INSTEAD OF IN A COURT BY A JUDGE OR JURY. EXCEPT AS OTHERWISE PROVIDED IN THESE TERMS OF USE, YOU AND WALMART AGREE THAT EACH IS WAIVING THE RIGHT TO SUE IN COURT AND TO HAVE A TRIAL BY A JURY.
https://www.walmart.com/help/article/walmart-terms-of-use/de696dfa1dd4423bb1005668dd19b845
https://www.walmart.com/help/article/walmart-com-terms-of-use/3b75080af40340d6bbd596f116fae5a0
The Disney case serves as a cautionary tale, highlighting the potential dangers of arbitration clauses, but Disney’s voluntary change of course does not mean that consumers will always have the option to litigate their disputes in a court of law.
The Hidden Dangers of Arbitration Clauses
Arbitration clauses can restrict consumers’ legal rights in several ways:
- Questionable fairness: Arbitrators are often appointed by the company, raising concerns about their impartiality.
- Finality: Arbitration decisions are generally final, with no chance for appeal, limiting consumers’ options.
- Potentially more expensive: Arbitration can be more costly than traditional court proceedings, especially for consumers.
- Unpredictability: The outcomes of arbitration can be less predictable than court cases, as there are no established rules or precedents.
- Class action waivers: Many arbitration clauses prohibit class-action lawsuits, preventing consumers from joining together to pursue claims against large corporations.
Arbitration clauses really leave consumers powerless in the big picture and sometimes prevent them from obtaining the full remedy they deserve.
The Unfair Power Dynamic of Contracts of Adhesion
Most people, if fully informed about the implications of arbitration clauses, would likely choose not to agree to them. So how do these clauses end up in consumer contracts? The answer lies in the concept of contracts of adhesion.
Contracts of adhesion are standardized form contracts that are offered on a take-it-or-leave-it basis. Consumers have little or no bargaining power to negotiate the terms of such contracts, including the inclusion of arbitration clauses. This creates an unfair power dynamic that can significantly limit consumers’ rights.
The Erosion of Constitutional Rights
The widespread use of mandatory arbitration clauses in consumer contracts raises serious concerns about the erosion of constitutional rights. The right to access the courts is a fundamental principle of American jurisprudence, and it should not be easily circumvented by private agreements.
When consumers are forced to arbitrate disputes instead of seeking justice through the court system, they may be denied the opportunity to have their cases heard by a jury of their peers, to appeal adverse decisions, and to participate in class-action lawsuits. These limitations can have a significant impact on consumers’ ability to protect their rights and seek redress for wrongs.
The Need for Legislative Reform
To address the growing concerns about arbitration clauses and their impact on consumer rights, it is essential for policymakers to take action. Legislation should be enacted to prohibit mandatory arbitration clauses in consumer contracts. This would ensure that consumers have the option to choose whether to arbitrate disputes or pursue legal remedies through the court system.
Furthermore, policymakers should consider implementing additional reforms to protect consumers from the unfair practices associated with contracts of adhesion. These reforms could include:
- Mandatory disclosures: Requiring businesses to clearly and prominently disclose the terms of arbitration clauses in consumer contracts.
- Prohibitions on unfair terms: Banning certain types of unfair or unconscionable terms in contracts of adhesion.
- Class-action lawsuits: Allowing consumers to bring class-action lawsuits against businesses that violate consumer protection laws related to arbitration clauses and contracts of adhesion.
By taking these steps, policymakers can help to level the playing field between businesses and consumers, ensuring that the right to access the courts is protected and that consumers have the opportunity to seek justice for wrongs committed against them.