On Wednesday, April 27, 2011 the Supreme Court ruled that consumers can be bound by arbitration clauses in cellular phone and/or other contractual agreements even if state law permits class action law suits for claims arising out of such agreements. AT&T Mobility LLC v. Concepcion et ux. What the Supreme Court's ruling means for consumers is that if you agree to the terms of a contract, whether you read the contract or not, and that contract contains an arbitration clause stating that arbitration rather than the court system can decide the outcome of any grievance you have against the corporation with which you have contracted, you must use arbitration as your only means to obtain any compensation for damages suffered.
Arbitration is a way to resolve disputes without using the court system. During arbitration an arbitrator, a neutral third party, will decide the outcome of a case. The determination made by the arbitrator may based partially on law, but is usually based on the agreement and what the arbitrator determines is fair for all the parties. If you have agreed to an arbitration clause in a contract, the decision made by the arbitrator is then binding upon the parties and cannot be modified by the court system.
When entering into a contract for a cellular telephone or entering into a contract on-line be aware that arbitration clauses can and do exist in those contracts. Based upon this Supreme Court decision, should you sign a contract with an arbitration clause included, any dispute you may have against another party to the contract will be determined by arbitration which is binding and precludes you from seeking a remedy in a court of law.
