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Abstract

Businesses are accused of using arbitration as a private dispute resolution system that shields their transgressions from public scrutiny, uses arbitrators and institutions that are perceived as biased, and prevents any real means of justice to the consumer. Something must be done to ensure that consumers facing mandatory arbitration clauses within contracts of adhesion are protected from businesses that seek to use arbitration as an advantageous means to resolve disputes. The American public, a section of Congress, and the arbitration community are all responding, but out-of-date law and recent decisions are thwarting their efforts. It is time for Congress to act, but in doing so it must recognize that old biases toward the use of arbitration will not move the discussion forward. Congress must seek to address the use of arbitration in consumer contracts without creating new issues by prohibiting the use of arbitration in its entirety and/or by attempting to protect consumers from contract clauses that do not seek to enhance the power imbalance that is inherent within contracts of adhesion.

This Article will seek to address these issues by first identifying the issues relating to the FAA, the surrounding case law, and the alternative readings of section 2 of the FAA. The Article will then examine and reject some of the early attempts at addressing those issues while considering current attempts by both academics and industry to address the issue of contracts of adhesion and arbitration clauses. The Article will conclude, in Part III, by considering who should be protected, identifying what they should be protected from and how those protections can be accomplished. Finally, the Article will claim that Congress must seek to protect a narrow class of individuals from significantly disadvantageous arbitration clauses within contracts of adhesion.

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