Arbitration and the free market

by Ted Frank on December 15, 2007

Let us imagine a writer for a left-wing magazine, we’ll call her Mephanie Stencimer, who wants to buy a car. But she has particular tastes: she doesn’t just want any old car. She wants a three-wheeled vehicle, perhaps because the feng shui is better, perhaps because she wants to spend less money on tires forced upon her by Big Rubber. She goes from car-dealer to car-dealer around town, but every single one of the dastardly businessmen insist that her only choice is a four-wheeled vehicle. She patiently explains the aesthetics of the triangular approach, but they shrug their shoulders and tell her it’s out of their hands and she has to have a four-wheeled car or nothing. Finally, she surrenders her preference for the three-wheeled vehicle, and takes a model with the extra wheel.

If you were to take seriously the arguments of Stephanie Mencimer at Mother Jones and the commenters there, and perhaps the occasional judge, this is an outrageous “contract of adhesion” that should be outlawed: Stencimer didn’t have a choice, didn’t have the bargaining power to make the auto-dealer sell her a three-wheeled car, and was forced to buy an extra wheel. But is this really a problematic failure of the market that requires government intervention?


Mencimer is actually complaining about the insistence of car-dealers to arbitrate claims, rather than the number of wheels on a vehicle. But the principle is precisely the same, and Mencimer’s complaint is just as invalid as Stencimer’s.

When certain choices are absent from a competitive market, there’s usually a good reason for it—such as a lack of consumer demand that makes the provision economically infeasible. After all, if consumers really wanted to pay the extra money for a car contract without a mandatory arbitration clause or a three-wheeled vehicle, car-dealers would have a strong incentive to offer it. Witness the boom in hybrid vehicles: a small percentage of consumers demanded greener vehicles, and they’re selling. It’s not the case that it’s impossible to enter the used-car market: witness the success of CarMax, which went public only ten years ago, and has a market capitalization of nearly $5 billion today. ATLA Autos could put up a big banner: “No Arbitration Clauses In Our Contracts!” the way CarMax made no-haggle sales popular.

But the fact of the matter is that arbitration clauses save consumers money, and ex ante, if you ask a consumer if they’d rather have the money or the right to make an extortionate claim in court over a contractual dispute where they’re in the wrong, they’d rather have the money. (If mandatory arbitration clauses weren’t actually money-saving, then, again, the market provides plenty of incentive to cut costs by removing them from the contracts.) A car-dealer that made a point of omitting arbitration clauses for its contract, and passing the higher legal expenses on to the consumer, would quickly find itself out of business.

Let’s make clear why an argument Mencimer repeats is dishonest. Mencimer quotes former Georgia Governor Roy Barnes that “a mandatory arbitration clause is ‘a contract for a crime.’ It’s a sign that the bank knows it’s going to rip us off in some fashion, or if not us specifically, people like us, and it doesn’t want to pay if it gets caught.” Not so. A mandatory arbitration clause is a way to make sure that dishonest consumers don’t raise prices for the honest consumers. The vast majority of arbitrations (as well as court-adjudicated business/consumer disputes) involve default or otherwise uncontested judgments against deadbeats who didn’t pay their bills—which is why you hear so much about the supposed 96% or 99% success rate of business in arbitration, when the actual success rate in contested arbitrations is actually better for consumers than in court. I won’t link to it, but a Google search readily finds numerous products available to people teaching how to use the court system to scam creditors out of legitimate collections by raising their expenses; the only people who benefit from court versus arbitration are those who hope to abuse legal procedures to delay the inevitable (or to make collection so painful and expensive that they can finagle a reduction in debt). By using the mandatory arbitration mechanism to reduce the expense of collections, the auto-dealer or bank can provide a less expensive service to the honest consumer who plans to honor their debts. (Mencimer complains that her car loan was for 9%, but that doesn’t mean that it wouldn’t have been at an even higher rate had arbitration not been available.)

Now, perhaps I’m wrong; perhaps consumers are better off overall if they don’t have mandatory arbitration clauses. But why have Congress dictate that? Why not let the market decide? As CarMax demonstrated by offering a new no-haggle model of selling vehicles and CommerceBank demonstrated by offering banking without bankers’ hours, there’s no monopoly of car dealers or banks prohibiting entry by innovators offering new business models: get some of the trial lawyer billionaires funding Public Citizen screeds against arbitration to instead fund new businesses to offer different choices, and let consumers decide for themselves whether they want the lower prices that mandatory arbitration clauses make possible. Heck, the trial-lawyer-funded businesses could even waive non-economic damages caps, venue reform, and all of the tort reforms Mencimer and Public Citizen dislike. Nothing makes businesses yield faster than competition and consumer demand.

Of course, what’s really happening is that consumers don’t want the expensive legal “protections” that the litigation lobby are railing about. Trial lawyers thus try to get Congress to pass laws to force consumers to take them. If the local auto-dealers association heavily lobbied Congress to legally mandate consumers to force them to buy overpriced “rust protection” or “anti-rhinocerous-trampling” plans that benefited only the auto dealers, consumer groups would quite properly raise an uproar. It’s a sad commentary how badly the consumer movement has been captured by the litigation lobby that the consumer groups are failing to raise a similar uproar at the self-dealing of the litigation lobby regarding the anti-consumer anti-arbitration legislation pending in Congress.

Further reading: Christopher R. Drahozal, “Unfair” Arbitration Clauses, 2001 U. ILL. L. REV. 695; Stephen J. Ware, Paying the Price of Process: Judicial Regulation of Consumer Arbitration Agreements, 2001 J. DISPUTE RESOLUTION 89; Christopher R. Drahozal, Privatizing Civil Justice: Commercial Arbitration and the Civil Justice System, 9 KAN. J.L. & PUB. POL’Y. 578 (2000). Peter B. Rutledge, Whither Arbitration, 6 GEORGETOWN J. L & PUB. POL’Y __ (forthcoming 2008), ExpressO Available at: http://works.bepress.com/peter_rutledge/2. The three-wheeled example comes from Doug Baird’s Contracts class at Chicago, and can be found in Douglas G. Baird, The Boilerplate Puzzle, 104 MICH. L. REV. 933 (2006).

Earlier on Overlawyered: Oct. 18; Nov. 27.

Update, Dec. 16: Further data on arbitration win-rates in contested arbitration.

Update, Dec. 17: As Mencimer documents in her story, she sure showed the car dealers: she bought her desired vehicle on Craigslist from a West Virginia man. And that’s the way the market works: if enough people think like Mencimer does, auto dealers will have the incentive to offer an arbitration-free contract to attract their business. Of course, as commenter JP points out, Mencimer’s irrational hatred of arbitration almost certainly made her worse off:

Note that the practical result of all of her time and effort is that she now has the right to sue an individual (who likely has no assets since he’s selling his car due to a divorce), in court in a different state (where the seller lives and the transaction took place). For that she gave up the right to a local arbitration with a dealership that’s not only likely to be solvent, but also probably has the ability to resolve most issues that might arise.

{ 28 comments }

1 Bill 12.14.07 at 10:22 pm

Renault, I believe, made a three-wheeled car at one time. I’m sure she could get one in a car museum for the right price. Too much? I can’t get a Porsche for the price I want either!

2 Flavio M. Rose 12.14.07 at 10:23 pm

It appears that the answer to Mephanie’s problems is here. The webpage unfortunately says that only 300 were built.

3 Tim Worstall 12.15.07 at 7:03 am
4 Bill Barth 12.15.07 at 9:12 am

I don’t agree with Ms. Mencimer’s stridency, but I do find the way these arbitration clauses are brought in pretty scummy. E.g.: I go to the car dealer, and we work out which car I want, which options it has, and what color I’ll get. Then, most often with the same salesman, we haggle over the terms: price, rebates, value of my trade-in, down payment, and interest rate. Once we’ve settled all of this, we “close the deal” with a hand shake, and the salesman hands me off to someone in the business office to “sign the paperwork.” Then, lo and behold, we discover there are all these extra terms that the salesman didn’t mention which are non-negotiable (like the mandatory arbitration clauses). It’s practically bait-and-switch, and the psychological pressure to go on with the deal is huge.

If the car dealers (and banks as in Ms. Mencimer’s article) were interested in the free market, they’d put a dollar number on these clauses and put them on the sticker. Then consumers would have options. I say let Congress make non-negotiable, surprise, binding arbitration clauses illegal, but only if reasonably negotiated, mutually agreed, binding arbitration clauses remain legal.

5 D. 12.15.07 at 11:22 am

You might want to remind readers about Mencimer’s book, which had some vivid on-the-ground reporting from Mississippi that put to rest the idea that the fen-phen jurors and trials were corrupt. the current mess with Dickie Scruggs paints a different view of the county courts she wrote about.

6 Melvin 12.15.07 at 11:30 am

Bill it would not be bait-and-switch, at least as I learned it in school.

Bait-and-switch would be, using your example, if you did all you mentioned to get the described car (whether on the floor or in advertising), only when you get to the dealer (and after all the haggling), you’re told that the specific car is not available/last one just sold, and you’re shown a similar car with more (read expensive) options–or something entirely different from what you agreed to purchase (or was advertised).

7 Bill Barth 12.15.07 at 11:54 am

Melvin, of course you are correct, except that you misquoted me. I said that it’s practically bait-and-switch. And, not surprisingly, what you describe as bait-and-switch is almost exactly what happens. You negotiate a deal with the salesman, and, lo and behold, the car comes with this additional thing that was neither advertised or agreed to during negotiations (i.e., the binding arbitration clause).

8 Todd Rogers 12.15.07 at 9:58 pm

As I mentioned elsewhere, she could always move to another country. She could also A) find a private lender who is willing to submit to traditional civil action, B) pay cash, C) use transportation which does not require financing (bike, bus, train, walk). What this naive soul wants is to have her cake and eat it; lower rates and borrower-friendly conditions. I’m still not sure why her “ones & zeros” were even post-worthy in the first place. If I had to extrapolate, I would suspect she’s jumping for joy at the idea of a government-backed sub-prime mortgage bail-out, too (sorry for all the hyphens).

9 David Boyd 12.16.07 at 12:22 pm

I’m afraid your argument is as flawed and unconvincing as that of the Consumerist. Your statement without any citation or supporting argument that all of the high percentage of consumer claimants in arbitration proceedings were in the wrong is just as biased as the Consumerist’s claim that the majority of them were deprived of justice by the decision against them in arbitration.

I think the real problem with arbitration for is one that plagues America today, willful ignorance. Few people read what they sign. Finance “closers” at car dealerships get antsy if you take the time to read the contract, you’re expected to accept their verbal synopsis of the contents of the documents and sign. I’d venture to say that the majority of people signing contracts with a binding arbitration clause don’t realize it’s there at all. It’s quite easy to see how many wheels a car has, and that sort of feature of a vehicle is in fact driven by market forces. You know as well as I do that companies requiring binding arbitration are NOT doing it to serve or protect the customer, they’re doing it to protect their own bottom line. This MAY result in lower consumer prices as a side effect, but I’d have to see believable research before I made that assertion.

The real issue is whether or not consumers have a viable choice. I think Americans finance too many things and save too little, so I think if enough of them had sufficient sense to read the contract and opt not to buy the thing for which binding arbitration is being forced upon them, it would be good in the long run. There isn’t real choice in the market if you’re financing… perhaps it would be good incentive to pay as you go. However, I’m cynical enough to realize that Americans aren’t suddenly going to start to educate themselves about their business transactions, they’re not going to read the contracts and make informed decisions, they’re just going to keep chasing the shiny objects dangled in front of them in the market and going to keep up the negative savings rate until the financing well runs dry.

10 Ted 12.16.07 at 1:17 pm

Your statement without any citation or supporting argument that all of the high percentage of consumer claimants in arbitration proceedings

Your premise is incorrect: I gave several cites in the last two paragraphs.

You know as well as I do that companies requiring binding arbitration are NOT doing it to serve or protect the customer

I don’t know that, because it’s not true. Companies require binding arbitration because it reduces costs, and thus permits them to lower prices and attract more consumers. Lower prices benefit consumers.

This MAY result in lower consumer prices as a side effect, but I’d have to see believable research before I made that assertion.

Again, look at the evidence cited.

I think Americans finance too many things and save too little, so I think if enough of them had sufficient sense to read the contract and opt not to buy the thing for which binding arbitration is being forced upon them, it would be good in the long run.

It’s nice to see someone admit that the real reason for legislating against mandatory arbitration is that he’s hoping to have government dictate what consumers can and cannot buy because he thinks he knows what’s best for consumers. That’s not consumer-friendly in the slightest.

11 Bill Barth 12.16.07 at 1:26 pm

Todd, if you read carefully enough (by clicking through to the first article in the series, linked to at the top of the article Ted highlights), you’ll notice that she offered to write a check for the car, but the car dealership still wanted a contract between them to govern the conditions of the sale. So paying with cash would have gotten her away from the lender’s arbitration clause but not the dealer’s.

The “move to another country” line is shamefully disengenuous, BTW. And, as noted above, I don’t think this issue is worth the stridency Mencimer puts into it, but I do find the fact that basically no lender was willing to loan money without such a clause concerning.

12 David Boyd 12.16.07 at 4:42 pm

You did not cite any of those specifically, but referred to them as “for further reading” and the 2 that are accessible online don’t support the argument that arbitration results are more (or less) fair to the consumer than are the results of litigation.

Your reading into my statement that Americans should have sufficient sense to read contracts and make more informed decisions is flatly wrong. You can’t legislate stupidity and I’m not proposing that anyone do so. I simply meant that more-informed consumers would make better decisions.

I have less problem with arbitration as a concept than I do with the mandatory nature of it. I think that reasonable tort reform would serve both consumer and vendor better than mandatory arbitration with no checks, balances or recourse, but then our “free market” congress (that is, freely available on the market to anyone willing to put enough money into lobbying) will not make that sort of change.

13 Todd Rogers 12.16.07 at 7:54 pm

Bill.
Point taken on the attempted cash purchase. While in print, without the benefit of tone, inflection, etc.. my suggestion of move to another country doesn’t appear sincere; perhaps I was being metaphorical. If circumstances were such that lenders or dealers we so hurting that they had to give on certain matters to win deals, then they would probably be willing to discuss this term. Slight subject change: this isn’t so much a matter of contracts as it is business negotiation. By definition, bargaining has to have at least have two parties who agree to something. The “no deal” option is not off the table. I think the author is trying to argue that this is somehow a de facto closed transaction, or perhaps even de jure and someone ought to step in and fix the problem…how dare they…there ought to be a law against this kind of strong arming. If that is indeed her point, then I will offer that she will need to accept that B.A. clauses are a standard at this time. If she really had her heart set on the vehicle, and got the standard “sorry, we don’t do that” answer, I’d say she’s not asking the right person. Aside from that, it just sounds like she’s trying to make a case for paternalism.

14 Roy Bickley 12.17.07 at 11:09 am

There have been a number of 3-wheelers built since the dawn of the motor car, mostly for tax reasons. A number are still manufactured throughout the world. A Reliant may easily be found by logging on and doing a search. Many other types may be also found by simply looking on the internet and trying. I suspect the writer is not interested in a 3 wheeler, but in writing a stident article and getting published with no interest in reality.

15 JP 12.17.07 at 11:35 am

Note that the practical result of all of her time and effort is that she now has the right to sue an individual (who likely has no assets since he’s selling his car due to a divorce), in court in a different state (where the seller lives and the transaction took place). For that she gave up the right to a local arbitration with a dealership that’s not only likely to be solvent, but also probably has the ability to resolve most issues that might arise. Brilliant!

16 Ralph Phelan 12.17.07 at 5:03 pm

I do find the fact that basically no lender was willing to loan money without such a clause concerning.

So do I. That the American legal system has earned itself such a resounding vote of “no confidence” from both auto dealers and lenders … and who knows how many other classes of businesses … is indeed cause for concern.

17 J. Bingham 12.17.07 at 6:28 pm

Question I’d like answered by an Overlawyered guru:

She writes, “We wouldn’t be able to sue SunTrust if the bank defrauded us or illegally repossessed our car.”

Am I correct in thinking that she wouldn’t be able to sue in civil court, but that there would be criminal penalties against a company that illegally repossessed a car?

Wouldn’t that practically be the definition of illegal repossession?

I would think the same would be true for fraud, but she didn’t undermine her point by using the word “illegal” there…

Thanks!

18 Ima Fish 12.18.07 at 9:52 am

God, was this site taken over by liberals?! This is the most poorly thought out argument I’ve ever read.

First, if you’re going to make an analogy, it has to be analogous.

Thus, in your analogy with a three wheeled vehicle which does not exist, there has to be a real world where there is no alternative to arbitration. There is. It’s our court system.

So while demanding something from a retailer that does not exist is clearly stupid, demanding something that does exist is completely reasonable. Thus, it is quite clear that your analogy is not even remotely analogous.

Second, this fits into what I was talking about last week.

When a rich woman freely negotiates a contract with her lawyers, somehow it’s a bad thing.

But when the common-man wants to freely negotiate a contract with a dealer, but is unable to, that’s a good thing.

As I said before, if you guys want to be taken seriously, your arguments have to be consistent. You cannot be so apparently biased in favor of the rich.

19 Ted 12.18.07 at 10:14 am

Ima:

1) The Mencimer/left-wing complaint about mandatory arbitration clauses is that they are “contracts of adhesion” and that consumers do not have the choice to modify them. The three-wheeled example demonstrates that that alone is no reason for government intervention.

2) It’s perfectly alright for a woman, rich or otherwise, to negotiate a new contract with her lawyers. It’s problematic when the lawyers, who have a fiduciary relationship to an existing client, renegotiate an existing agreement to the client’s disadvantage. The auto dealer is operating in a market environment. The attorney has asked for and received government-imposed barriers to entry on the grounds that he is supposedly serving a higher purpose than mere market profit. The contract is perfectly alright as a contract; the attorney’s self-imposed ethical obligations are in question. It has nothing to do with the wealth of the party, though attorneys who have received $7 million in schnorred gifts from their clients are generally wealthier than used-car dealers.

20 Deoxy 12.18.07 at 10:19 am

Ima Fish,

“But when the common-man wants to freely negotiate a contract with a dealer, but is unable to, that’s a good thing.”

There is inded complete and free negotiation going on here! Where is the GOVERNMENT intrference? Just because no sane auto-dealer will sell a car to you without an arbitration clause DOES NOT MEAN that people are not “freely ngotiat[ing]“. Free negotiation goes BOTH ways, and the car dealers freely refuse any deal without an arbitration clause. Neither party is bound to accept the terms desired by the other… they can both walk away.

“When a rich woman freely negotiates a contract with her lawyers, somehow it’s a bad thing.”

Except that she ALREADY had a contract with the lawyers in question, meaning that they had a fiduciary obligation to her… WHICH THEY VIOLATED. That is to say, the creation of the second contract in this way was a clear violation of their duties incurred by the first contract – thy had to violate the first contract to even OFFER the second.

“So while demanding something from a retailer that does not exist is clearly stupid, demanding something that does exist is completely reasonable.”

3-wheel cars clearly do exist… it’s just that car-makers don’t bother to make them for financial reasons. Selling a car without an arbitration clause is quite analogous to that – no on chooses do so, because it would be financially ruinous.

I’ve a very conservative/libertarian fellow; in fact, I am practically the anti-thesis of “liberalism” as it currently exists in this country. I followd the arguments of the original post, and they are quite sound.

21 Ima Fish 12.18.07 at 11:31 am

“The three-wheeled example demonstrates that that alone is no reason for government intervention.”

No, because your attempt at analogy failed. It’s not analogous so it’s complete nonsense and proves nothing. Since when does a failed argument prove anything? (Other than the contrary of the point attempted to be proved, of course!)

“It’s problematic when the lawyers, who have a fiduciary relationship to an existing client, renegotiate an existing agreement to the client’s disadvantage.”

“meaning that they had a fiduciary obligation to her… WHICH THEY VIOLATED. “

First, of all, there has been no ruling that anything has been violated. For some reason, I guess because a rich person is being harmed, you want to jump to that conclusion, but it’s not been shown as of yet.

Second, if the rich lady did not like the offered, not imposed, contingency fee agreement, she was completely free to turn it down. She did not, she accepted it.

In this car dealership case, the buyer cannot chose between arbitration and not, it’s imposed. Thus, there is no freedom of negotiation on this point. But, apparently because a rich person is not being harmed, that’s perfectly OK.

“3-wheel cars clearly do exist.”

Ok, let’s get semantical, if that’s the depths you want to take. Sure, three wheeled cars are logically possible. They may even be produced somewhere on this planet, but they are not reasonably available. Unlike our court system which is. Thus, it is not analogous. To assume that the car manufacturers of the world would have to redesign and retool their factories to make a three wheeled car for one person is nonsense. However, the court system is already set up in the US and is fully in place ready to hear disputes of law and fact.

“I followd the arguments of the original post, and they are quite sound.”

So you consider arguments by analogy to be “quite sound” even when they are clearly not analogous to the real world?! I can’t really say anything to that point that hasn’t been said already.

22 Ted 12.18.07 at 12:01 pm

Ima, the distinction you raise between three-wheeled vehicles and commercially-sold vehicles without arbitration clauses is a distinction without a difference. The analogy holds because the reasons given for forbidding mandatory arbitration clauses apply equally to the case of the frustrated buyer of the three-wheeled vehicle. (The buyer cannot choose a vehicle without four wheels, it’s imposed.) If you find the analogy distasteful, take it up with Professor Baird, from whom I took it.

It’s possible to offer a car on different terms and conditions. So what? Why does that change the right of the seller to offer the terms and conditions he does?

Please devote Graubard v. Miller discussion to one of the three posts discussing that case.

23 Ima Fish 12.18.07 at 12:18 pm

“The buyer cannot choose a vehicle without four wheels, it’s imposed.”

That’s a stretch of the word imposed. Once again, while a three wheeled vehicle does not reasonably exist in the real world, the US court system does reasonably exist. Thus, the two circumstances are not analogous. It’s that simple.

“If you find the analogy distasteful, take it up with Professor Baird”

I did not find the attempt at analogy “distasteful.” As explained, I found it without any analogous counterpart in reality. I found it utterly invalid. And merely appealing to authority in no way makes it so. (Not that any appeal to authority ever saves an argument in and of itself!)

“no reason for government intervention.”

I must be slow today, I had not thought of this point until now. You claim there is no reason for government intervention. (I probably agree with you, I was just responding to the poor argument by analogy that was made.)

However, when a rich woman freely accepts an offer of contingency fee, you think there should be government interference. You think people should not be allowed to freely chose to accept an offer of a contingency fee from an attorney. You think the government should intervene and impose “fiscal duties” on the lawyers and that any such contracts freely entered into should be voided.

Once again your bias is showing.

24 Ted 12.18.07 at 1:41 pm

Ima, you’re misrepresenting my position on Graubard v. Miller, which is not a standard contractual arrangement between strangers dealing at arms’ length. If you wish to discuss what I actually said about that case, feel free to raise it in the existing Graubard threads.

25 Ima Fish 12.18.07 at 2:28 pm

“you’re misrepresenting my position…”

I’ll just finish with this: The message and underlying point of the Mother Jones’ piece was clearly wrong. Merely because all dealers specify the same provision in a contract does not in anyway mean that the government has to get involved.

Second, arbitration agreements (generally) help consumers because they lower the cost litigation which end up lowering the cost of the product.

My point is that there is no reason to create a hypothetical world, where an insane person unreasonably wants a three wheeled car, in order to defeat Stencimer’s argument. Defeat the argument on its merits, not by making an absurd attempt at analogy!

26 Ralph Phelan 12.18.07 at 2:29 pm

But when the common-man wants to freely negotiate a contract with a dealer, but is unable to, that’s a good thing.

“Freely negotiate” has to include the right to say “no deal” if it’s to mean anything at all. Not all free negotiations result in success – sometimes the parties’ desires are just plain incompatible.

I bet if Ms. Mencimer had offered a $1,000,000 bonus to forgoe the arbitration clause she would have eventually found a dealer who would take it. But her article seems to indicate that she never offered any bonus at all for her desired contract modification; she seemed to expect it to just be given to her for free. She freely negotiated and found noone willing to sell to her what she wanted at the price she was willing to pay. Oh well.

27 Joe Bingham 12.18.07 at 2:46 pm

Deoxy, please stop yelling. I tend to agree with your points, but caps do not make reformers seem cuddly, or even courteous.

28 Deoxy 12.19.07 at 11:10 am

Sorry for the all caps, but it’s so much easir than HTML tags.

Ima,

I have no such bias towards the rich – in fact, I myself am not remotely wealthy. I am holding a principled position… which happens to show up more when dealing with the wealthy because a) they make more transactions, and b) they’re the only ones worth trying to rip off.

I will reduce the analogy as far as I can to help you out:

Car makers can make 3-wheeled cars, but it would be financially ruinous, so they, of their own free will, choose not to.

Car sellers can sell cars without an arbitration clause, but it would be financially ruinous, so they, of their own free will, choose not to.

Car BUYERS can buy cars with three wheels if they can find someone to make it for them for the amount of money they are offering.

Car BUYERS can buy cars without an arbitration clause if they can find someone to sell it to them for the amount of money they are offering.

It really boils down to this, Ima:

Arbitration clauses are “imposed” by whom?

The car sellers? They actually force you to buy their cars?!? No, you choose to buy their cars. If the deal is not to your liking, you can refuse. You can offer to buy their car without an arbitration clause, and, if the offer is not to their liking, THEY can refuse.

There is no “imposing” at all in this situation. Both sides are free actors.

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