give up their right to sue the company if they download coupons, ?join? it in online communities like Facebook, enter a company-sponsored sweepstakes or contest or interact with it in a variety of other ways.

Instead, anyone who has received anything that could be construed as a benefit and who then has a dispute with the company over its products will have to use informal negotiation via email or go through arbitration to seek relief

Liking a product is not a benefit to the consumer; it’s a benefit to the company. Given that, I think homeless people should write the following on their tin cans: “By donating to me, you agree not to sue me should I stab you with a screwdriver during a psychotic episode.”

See Forum Selection Clause discussion in Wiki

which links to

Arbitration Clause in Wiki

Federal Arbitration Act

Prima Paint Corp. v. Flood & Conklin Mfg. Co.

Dissent[edit]Black’s four-part dissent was longer than the majority opinion he responded to. He took issue with every aspect of Fortas’s reasoning.

In his introductory paragraph, he was blunt:

The Court holds, what is to me fantastic, that the legal issue of a contract’s voidness because of fraud is to be decided by persons designated to arbitrate factual controversies arising out of a valid contract between the parties. And the arbitrators who the Court holds are to adjudicate the legal validity of the contract need not even be lawyers, and in all probability will be nonlawyers, wholly unqualified to decide legal issues, and even if qualified to apply the law, not bound to do so. I am by no means sure that thus forcing a person to forgo his opportunity to try his legal issues in the courts where, unlike the situation in arbitration, he may have a jury trial and right to appeal, is not a denial of due process of law. I am satisfied, however, that Congress did not impose any such procedures in the Arbitration Act.[14]

He noted that Congress had explicitly not included in the FAA the language it normally used to apply to all commerce, leading him to doubt that the arbitration clause in the consulting agreement was covered by it. Nor did the Act provide as clear an answer as the majority claimed as to what sort of challenges to the formation or execution of the contract might necessarily be first heard by a court. And lastly the majority had not provided sufficient justification for its reading of Bernhardt and Erie Railroad. “The Court approves”, he protested, “a rule which is not only contrary to state law, but contrary to the intention of the parties and to accepted principles of contract law ? a rule which indeed elevates arbitration provisions above all other contractual provisions”[15]

His second and third sections went into great detail about the legislative history of the FAA, quoting from Montana Senator Thomas J. Walsh’s statements about it during hearings and those of the American Bar Association’s lobbyists, who had helped draft and pass it, suggesting that it was not meant to be interpreted as the majority and the Second Circuit had. He noted that New York’s state Arbitration Act, on which the federal law was based, explicitly provided that a claim of misrepresentation in a contract with an arbitration clause was to be heard by a judge. “Thus, 35 years after the passage of the Arbitration Act, the Second Circuit completely rewrote it”, in Robert Lawrence, whose reasoning the Court was now accepting.[16]

“If Prima’s allegations are true,” Black concluded,”the sum total of what the Court does here is to force Prima to arbitrate a contract which is void and unenforceable before arbitrators who are given the power to make final legal determinations of their own jurisdiction, not even subject to effective review by the highest court in the land.”[17]

Legacy[edit]Prima Paint established in federal jurisprudence what became known as the “separability” or “severability” principle in contracts with arbitration clauses, under which a legal fiction is created that the clause itself constitutes a contract separate from the underlying, or “container”, contract.

Starting in the mid-1980s, the Court has greatly expanded the reach of Prima Paint in later cases. Since some of these have applied to the expanded use of arbitration clauses in contracts of adhesion between companies and consumers, some consumer advocates and legal scholars have criticized the decision as the inadvertent opening wedge of an assault on the right to litigate, and a weakening of state contract law and the Erie Railroad principle of deference to state common law.

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Arbitration Clause in Wiki

An arbitration clause may nevertheless be challenged and held invalid if it designates a biased party as the arbitrator…

Other terms may void an arbitration clause…

may also be voided as unconscionable because of the relative positions of the parties involved….

the agreement lacks mutuality of obligation…

substantive unconscionability where the contract limited the damages…

Some legal orders exclude or restrict the possibility of arbitration for reasons of the protection of weaker members of the public, e.g. consumers…

arbitration agreements with consumers are only considered valid if they are signed, and if the signed document does not bear any other content than the arbitration agreement…

Looks like they’ve changed their mind.