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Federal Arbitration Act severely, and nearly completely, ties courts hands around throwing out binding arbitrations.

Of course, if people don’t accept the new terms, they are still bound by the one ones. But if you don’t opt out…



But having the company update a TOS that automatically removes rights from the consumer, after the consumer already agreed to a TOS that didn't previously restrict those rights is likely not going to hold up in court, either. Especially when the TOS changes were made after an event likely to trigger litigation.

This isn't a case of a minor change to consumer rights in the TOS like changing who would arbitrate a case. It's a significant restrictive change to the rights of the customer in favor of the company. And it was made after a security breach that affected a huge portion of the companies clients which is likely to trigger lawsuits of the form that the TOS now seeks to restrict.

This is clearly a case of attempting to close the barn door after the horse was spotted in the next county over.


The good news is binding arbitration has some significant downsides for corporations - look up "mass arbitration".




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