Deck 38: Ethics Today: Forced Arbitration: Right or Wrong?

Question 1

Linda enters into a contract for a credit card sponsored by Max'dOut Inc.The sponsor provides the contract,which contains an arbitration clause.This clause requires that any dispute must be submitted to private arbitration and prohibits class-action litigation.Under new rules sought by the Consumer Financial Protection Bureau,such clauses would be​

A)prohibited.
B)favored in contracts for credit cards and other financial products.
C)favored in all consumer contracts.
D)favored for all disputes involving relatively small sums.

Answer 1

A

Question 2

Beth enters into a contract for the services of Cable Connection Inc.The corporation provides the contract,which contains an arbitration clause.This clause requires that any dispute must be submitted to arbitration rather than being pursued through litigation.With respect to contracts with such clauses,federal courts have ruled all of the following except​

A)arbitration is encouraged under the Federal Arbitration Act.
B)arbitration can provide a meaningful way to seek redress for harm.
C)state law preempts federal law with respect to arbitration clauses.
D)federal law preempts state courts' interpretations of arbitration clauses.

Answer 2

C