From Marketplace.org, a four minute audio interview:

Americans accept contracts almost every day. Most recently it might have been on a computer — or on a phone for that matter. Netflix, AT&T, Starbucks— they all have them in one form or another. It seems you have to agree before you can do just about anything these days.

But according to Jessica Silver-Greenberg of The New York Times, there’s a good chance that contract will have a particular clause — usually nine words or so — that keeps your legal dispute in cheap, private arbitration instead of expensive court.

Questions:

• What types of contracts typically have arbitration clauses?
• Are arbitration clauses included in contracts good for consumers? Why or why not?
• What are the characteristics of arbitration?
• Why have companies been able to include these clauses in their contracts?

Here is the long-form NY Times investigation written by Jessica Silver-Greenberg which generated over 1,000 comments.  It’s lengthy but would be most interesting to your students interested in consumer law.

———————

Check out this NGPF Lesson on Reading Credit Card Fine Print

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.