Tag Archives: binding arbitration

Public policy favors arbitration of consumer and other civil disputes

In a recent post, we commented on Hyundai’s decision to abandon the arbitration clause in its new vehicle limited warranty. A reader pointed out that, generally, in consumer-dispute arbitration only the warrantor is bound by the award. The reader is correct that where a consumer protection statute or lemon law includes a state-run mandatory arbitration procedure, it generally permits a consumer dissatisfied with an award to reject it and proceed to litigation.

Contractual arbitration clauses, however, are reviewed under the Federal Arbitration Act (“FAA”) and generally enforced by the courts. Continue reading

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Filed under Court Decisions, Statutes & Regulations, Warranty