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> binding arbitration should be made illegal

Why do you want to interfere and limit my right to execute a contract?




A contract requires a "meeting of minds", informed consent, and both parties having reasonable power to negotiate the contract. Such contracts definitely can contain clauses like binding arbitration, and you should be free to execute such contracts.

However, there's a strong opinion (e.g. encoded in EU law) that the standard contract forms offered by companies to consumers are not really properly negotiated contracts (even if consumers willingly sign them) and thus in such contracts you're not allowed to enforce a certain set of terms that are considered abusive. One of such terms is a binding arbitration clause.

Your customer is free to negotiate and make a contract containing such clauses with you, and then it'd be valid, but if you simply get all your customers to sign on the dotted line under such a clause, it's understood that you don't really have obtained informed consent from any of them.


There has to be equal information, equal negotiating power and recourse for both parties. There are many cases where there is a huge disparity in information between the parties : Doctors and patients, for example, is an obvious case, or between lawyers and their clients. I would argue that Amazon has far more negotiating power and information in any contract with the average consumer, and therefore the law should be heavily biased in favor of the consumer. Even if there was no binding arbitration and Amazon does screw up and harms the consumer, will the consumer even have the resources to prevail in a lawsuit? Binding arbitration stacks the deck even more in the favor of the more powerful party.

If Amazon were signing a contract with Google or Apple, I assume that they both would have relatively equal negotiating power and access to information. With you or I? I highly doubt I can afford it.


For the same reason we don't let people sign away personal rights. We have plenty of evidence showing that it is actively harmful to society at large. To pretend otherwise under the guise of "freedom!" is insulting to all involved. Including you.


Because there are some rights it's bad to be allowed to give up. You can't sign away your right to life or freedom. Being able to have your grievances heard in a court of law should be considered a fundamental right, like the right to life.


How about a somewhat updated law? Binding arbitration should only be legal when made between two entities who have a power difference no greater than that of an adult and a teenager. If the power difference is greater, say like that between a non-lawyer and a multinational corporation, then the agreement is illegal because consent cannot be given in such a power vacuum.


Why do you expect the state to give a shit about everything you write into a contract?

That's what California does with non-competes, it (figuratively) tells the company it is pretty cool that they have that contract and good luck.




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