The 'Infinite Arbitration Clause' Problem Extends Past Disney

'INFINITE ARBITRATION CLAUSES' by David Horton

The Case Against Infinite Arbitration Clauses

"For decades, the Supreme Court has expanded the Federal Arbitration Act (FAA), and companies have inserted arbitration clauses in hundreds of millions of consumer and employment contracts. But in an article forthcoming in the University of Pennsylvania Law Review, I explore a different way in which arbitration’s shadow is growing.

Traditionally, drafters only attempted to mandate arbitration of disputes connected to the contract that includes the arbitration provision (the “container contract”). Thus, even the broadest arbitration clause merely applied to “any controversy or claim . . . arising out of or relating to this agreement.” To enforce this limit, courts often refused to compel arbitration of claims that either (1) arose from shocking and unforeseeable wrongdoing, or (2) were brought by or against non-signatories, or (3) stemmed from events that occurred after the container contract had expired.

Now, however, businesses have started to experiment with what I call “infinite” arbitration clauses. These provisions exhibit at least one of the following characteristics. First, they insist that they govern all claims between the parties—even those that do not stem from the container contract. For instance, Sprint’s arbitration clause applies to “ANY (we really mean ANY) disagreements about our relationship.” Accordingly, at least on paper, infinite clauses cover behavior that has nothing to do with the original transaction, such as sexual harassment after the sale of household goods or “a punch in the nose during a dispute over medical billing.”"
- David Horton

Support:

[liaminwales]

For only 50K they got a lot of bad press, I dont get why they did not pay off with an NDA.
But I also dont understand the legal side, maybe it was going to cost a lot lot more?

[Aksel_]

This is not right. Someone needs to keep companies on check so they can't put abusive Terms in their policies. At this rate, a person could go to a park and fear for their life, because if anything goes wrong and the person gets hurt or worst, it would be the end because there would be no compensations and no justice to protect that person.