Arbitration under the Federal Arbitration Act (FAA) is the most important topic in current contract law and commentary. The Supreme Court has issued eight merits decisions construing the FAA since 2011, the lower state and federal courts issued more than 1,000 decisions considering the FAA in 2014, and there were 81 fulllength articles, notes, and comments on arbitration in the same year. Recently, three commentators, Professor Margaret Jane Radin of the University of Michigan Law School, Professor Nancy S. Kim of the California Western School of Law, and former Lecturer in Law James P. Dawson of the Yale Law School, have proposed the use of an expanded economic duress defense to help consumers combat unfair pre-dispute arbitration agreements. This Article summarizes each commentator’s position and identifies my concerns. While such arbitration clauses can sometimes be unfair, all three proposals are flawed on numerous grounds. The primary problem is that the authors’ revised duress doctrines draw unworkable distinctions between improper coercion of offerees and legitimate bargaining techniques in a free market society. My analysis is the first in the legal literature that comprehensively discusses the connection between the economic duress defense generally and FAA arbitration specifically. As I will demonstrate, the two subject areas emphasize freedom of contract as they promote the necessary certainty and predictability of contractual relations. Thus, they accomplish the proper balance between binding the buyer to the arbitral process he agreed to in the contract and prohibiting the seller from enforcing a bargain if he procured it through unduly coercive tactics.
Steven W. Feldman,
Pre-Dispute Arbitration Agreements, Freedom Of Contract, And The Economic Duress Defense: A Critique Of Three Commentaries,
64 Clev. St. L. Rev.
available at http://engagedscholarship.csuohio.edu/clevstlrev/vol64/iss1/6