Wednesday, September 4, 2013

Arbitration

Arbitration is typically used by a large number of companies to circumvent trial by jury.  It has its good points and its not so good points in the event the other party has the choice on determining the arbitrator.  Contrary to popular belief, there are ways around arbitration clauses.  Among them is unconscionability.  "Unconscionability has been defined as 'an absence of meaningful choice on the part of one of the parties, together with contract terms which are unreasonably favorable to the other party.'" Entergy Miss., Inc. v. Burdette Gin Co., 726 So.2d 1202, 1207 (¶11) (Miss. 1998) (quoting Bank of Ind., Nat'l Ass'n v. Holyfield, 476 F.Supp. 104, 109 (S.D.Miss. 1979)). There are two recognized types of unconscionability— "procedural and substantive." Taylor, 826 So.2d at 714 (¶13) (quoting Pridgen v. Green Tree Fin. Servicing Corp., 88 F.Supp.2d 655, 657 (S.D.Miss. 2000)).  Additionally, I have seen issues where there was legitimate provable fraud in inducement of the agreement where terms were filled in after a party signed.  This often happens in nursing home litigation for some reason.  Never think that you are stuck with arbitration, just because there is a contract for it.  The underlying facts may render the whole thing void which additionally can play well in resolving a case. 

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