Did you read the small print? 'Infinite' arbitration clauses are

ABA Journal

“The Happiest Place on Earth” may not have been living up to its name recently, when a forced arbitration case pushed Disney directly into the clickbait headlines.

After his wife died from a severe allergic reaction at a park restaurant last year, Disney allegedly told her widower that he had waived his right to file a class action lawsuit when he signed up for a Disney+ account in 2019 and visited the Disney World website in 2023. Instead, according to the terms that he had accepted, the case would be sent to arbitration.

The “infinite” arbitration clause used by Disney is considered to apply to related disputes against Disney and its affiliates or related entities in perpetuity, explains David N. Cinotti, a partner at Pashman Stein Walder Hayden in New Jersey.

“Such arbitration clauses are problematic in consumer agreements, which are ordinarily not negotiated between the parties, because they are not limited to disputes tied to the agreement in which they are contained,” Cinotti says.

For example, a typical clause might require arbitration instead of a class action suit against your cellphone carrier if you claim that it overcharged you in violation of the contract or consumer protection law. But a so-called infinite clause might purport to reach a claim against the employer of a driver who injured you and who happened to work for an affiliate of the cellphone carrier 10 years after you changed carriers, he says.

“They can, therefore, lead to absurd results that are far afield from what a reasonable consumer might believe an arbitration clause in a consumer agreement covers,” Cinotti says."

This article was originally posted in the ABA Journal.

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Did you read the small print? ‘Infinite’ arbitration clauses are on the rise

Published by Administrator on September 12, 2024September 12, 2024

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Did you read the small print? ‘Infinite’ arbitration clauses are on the rise

Published by Administrator on September 12, 2024September 12, 2024

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