Monday, August 20, 2007

AT&T's mandatory arbitration...

... is also found unconscionable: Shroyer v. New Cingular Wireless Services.
Under this three-part inquiry, courts are required to determine: (1) whether the agreement is “ ‘a consumer contract of adhesion’ ” drafted by a party that has superior bargaining power;
(2) whether the agreement occurs “ ‘in a setting in which disputes between the contracting parties predictably involve small amounts of damages’ ”; and (3) whether “ ‘it is alleged that the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small sums of money.’ ”
Because all three parts of the Discover Bank test are satisfied, Cingular’s class arbitration waiver is both procedurally and substantively unconscionable, and cannot be enforced.


Take it or leave it...

... mandatory, binding arbitration / choice of law clause found unenforceable in consumer agreement: Oestreicher v. Alienware.