Keep me logged in until I sign out. Corporations often use arbitration clauses in consumer sales agreements in order to limit the types of dispute resolution available should difficulties arise. Such a clause requires that the parties to the agreement resolve any disputes through arbitration.
Arbitration involves the competitive presentation of evidence to a neutral decision-maker.
While arbitration has the advantages of expedience and relatively low cost, an arbitration clause precludes parties from taking disputes covered by the arbitration clause to court. Since a class action lawsuit involves direct judicial oversight, arbitration clauses thwart the development of a consumer class. Instead, each individual consumer must pursue his or her own arbitration procedure against the contracting business. These clauses are extremely common in consumer agreements ranging from credit card agreements to car sales contracts. Such arbitration clauses may be illegal if they are unfair or constitute overreaching by businesses, and some consumers may prefer to do business with companies that do not limit their recourse.