Cancel Arbitration Agreement: A Consumer`s Guide
Arbitration agreements have become increasingly common in various consumer contracts, including credit card agreements, employment contracts, and even nursing home contracts. These agreements require consumers to waive their right to sue the company or participate in a class action lawsuit, and instead, resolve disputes through arbitration.
While arbitration may seem like a convenient and cost-effective way to resolve disputes, it often favors the company over the consumer. In fact, a study by the Consumer Financial Protection Bureau found that consumers who went through arbitration were less likely to win and received smaller awards than those who went through the court system.
Fortunately, consumers have the right to cancel arbitration agreements in certain circumstances. Here`s what you need to know:
When can you cancel an arbitration agreement?
Under the Federal Arbitration Act, consumers can cancel an arbitration agreement if:
1. The agreement allows you to cancel: Some arbitration agreements may include a provision that allows you to cancel within a certain timeframe, such as 30 days. If your agreement includes this provision, you may be able to cancel within the designated period.
2. The agreement is unconscionable: An arbitration agreement may be deemed unconscionable if it is one-sided and unfairly benefits the company. For example, if the agreement limits your right to discovery or does not allow for the recovery of attorney`s fees, it may be unconscionable.
3. The agreement was signed under duress: If you were pressured or threatened into signing the agreement, it may be considered signed under duress and therefore unenforceable.
How do you cancel an arbitration agreement?
To cancel an arbitration agreement, you`ll need to follow the procedures outlined in the agreement. Typically, this will involve sending a written notice of cancellation to the company within the designated timeframe.
If the agreement is unconscionable or signed under duress, you may need to take legal action to have the agreement declared unenforceable. This may involve hiring an attorney or filing a complaint with the appropriate government agency.
What are the benefits of canceling an arbitration agreement?
By canceling an arbitration agreement, you preserve your right to sue the company or participate in a class action lawsuit. This can be beneficial if you believe you have a strong case and want to maximize your potential recovery.
Additionally, by canceling the agreement, you can increase your bargaining power in negotiations with the company. Without the threat of arbitration, the company may be more willing to settle the dispute on favorable terms.
In conclusion, canceling an arbitration agreement may be a viable option for consumers who want to protect their rights and increase their chances of a successful outcome in a dispute with a company. If you believe your arbitration agreement is unconscionable or was signed under duress, consult with an attorney to explore your options.