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In contract law, an arbitration clause is a clause in a contract that requires the parties to resolve their disputes through an arbitration process. Although such a clause may or may not specify that arbitration occur within a specific jurisdiction, it always binds the parties to a type of resolution outside the courts, and is therefore considered a kind of forum selection clause.
A "naked" class action waiver is a version of the waiver where the contract in which the waiver is found is not attached to an arbitration agreement. Class action waivers are only protected from state legislatures' actions through the Federal Arbitration Act, if they are bundled with an agreement to send disputes to arbitration.
In contract law, a forum selection clause (sometimes called a dispute resolution clause, choice of court clause, governing law clause, jurisdiction clause or an arbitration clause, depending upon its form) in a contract with a conflict of laws element allows the parties to agree that any disputes relating to that contract will be resolved in a specific forum.
Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (1996): Montana law requiring disclosure of arbitration clauses to be "typed in underlined capital letters on the first page of the contract" preempted by FAA; [1] however, upheld authority of courts to refuse to enforce arbitration clauses on grounds of "generally applicable contract ...
So-called forced arbitration clauses say that in the event of a dispute, you won't be able to file a class-action suit. Instead, your dispute will be settled one-on-one in a private arbitration forum.
Disputes between consumers and businesses that are arbitrated are resolved by an independent neutral arbitrator rather than in court. Although parties can agree to arbitrate a particular dispute after it arises or may agree that the award is non-binding, most consumer arbitrations occur pursuant to a pre-dispute arbitration clause where the arbitrator's award is binding.
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