The Arbitration Opt Out — Sophisticated companies typically include arbitration clauses in their standard-form consumer contracts to make it more difficult for consumers to seek relief in the event of a dispute. Although touted as a quicker and less expensive alternative to litigation, arbitration forces consumers to shell out thousands of dollars in upfront administrative and arbitration fees for the privilege of having their dispute heard by private attorneys who, when they aren’t serving as arbitrators, oftentimes make their living representing corporate defendants. But more and more, companies have begun to include an “out” in arbitration clauses. Buried within paragraphs of single-spaced text there is sometimes a provision that allows the consumer to reject the arbitration clause by providing written notice to the company within a short time—perhaps 7 to 10 days—after the contract takes effect. Make no mistake, the purpose of this provision is not to benefit consumers. The purpose of this provision is to create the impression the consumer voluntarily agreed to arbitration by choosing not to opt out. But how many consumers pay attention to an arbitration clause when they initially purchase a product or service? Odds are, very few consumers, if any, take advantage of these opt out provisions. But YOU can. If you buy a product or service and are required to sign or click or otherwise accept a contract containing an arbitration clause, read it. If it gives you the right to reject arbitration, reject it. You may never find yourself in a dispute with the company that sold you the product or service, but you never know. Better to preserve your right to seek relief than to wish you had months or years down the road.
