Arbitration Clause in Context: How Contract Terms Do (and Do Not) Define the Process, The
Weidemaier, W. Mark C.
INTRODUCTION|Consider the following arbitration clause, which might be found in a contract of employment or a standard-form consumer contract: Any claim, controversy, or dispute of any kind between us will be resolved by binding arbitration, to be conducted in Philadelphia, PA under the then-applicable rules of American Arbitration Association or JAMS. The arbitrator may not award punitive or exemplary damages.|Arbitration clauses like these have engendered a significant amount of debate, much of which focuses on the proper response the law should make to "one-sided" clauses - i.e., those that limit the procedures and remedies available to individuals in arbitration. Because my example clause appears to prohibit awards of punitive damages and to require significant travel for individuals who live far from Philadelphia, it might fairly be termed "one-sided." |But the clause may not be as one-sided as it seems. In fact, the drafter of this "one-sided" clause may have anticipated that it would yield, in at least some disputes, a more "even-handed" process in which punitive damages are available and arbitration hearings take place in a location convenient for the individual disputant. Conversely, drafters of apparently "even-handed" clauses may sometimes expect them to yield a "one-sided" disputing process....
40 Creighton L. Rev. 655 (2006-2007)
Creighton University School of Law