ADR ADR Commercial & Consumer Dispute Resolution 1 — Questions and Answers
Question 1: What organization administers the Consumer Arbitration Rules specifically designed to protect consumers in the U.S.?
- JAMS
- The American Bar Association
- The American Arbitration Association (AAA) (Correct answer)
- The Federal Trade Commission
Correct answer: The American Arbitration Association (AAA)
The AAA's Consumer Arbitration Rules set minimum fairness standards for consumer disputes, including limits on filing fees and requirements for neutral selection.
Question 2: In U.S. consumer contracts, what doctrine can invalidate a mandatory arbitration clause?
- The parol evidence rule
- Unconscionability, if the clause is found to be procedurally or substantively unfair (Correct answer)
- The statute of frauds
- The business judgment rule
Correct answer: Unconscionability, if the clause is found to be procedurally or substantively unfair
Courts may refuse to enforce arbitration clauses found unconscionable—especially those with hidden fees, one-sided terms, or that prevent consumers from pursuing class relief.
Question 3: What is the 'CFPB arbitration rule' context in U.S. consumer ADR?
- A permanent federal rule requiring arbitration for all consumer financial disputes
- A 2017 CFPB rule that would have restricted class-action waivers in financial contracts, which Congress later overturned (Correct answer)
- A Supreme Court ruling expanding arbitration for consumer loans
- A state rule limiting arbitration fees in consumer cases
Correct answer: A 2017 CFPB rule that would have restricted class-action waivers in financial contracts, which Congress later overturned
The CFPB issued a 2017 rule limiting mandatory arbitration clauses in consumer financial contracts, but Congress used the Congressional Review Act to nullify it before it took effect.
Question 4: In commercial arbitration, what does 'seat of arbitration' determine?
- The physical room where hearings are held
- The legal jurisdiction whose arbitration law governs the proceeding and whose courts may supervise it (Correct answer)
- The location where the award must be enforced
- The country whose substantive law applies to the underlying dispute
Correct answer: The legal jurisdiction whose arbitration law governs the proceeding and whose courts may supervise it
The seat (or place) of arbitration determines which country's arbitration law applies procedurally and which courts have supervisory jurisdiction, even if hearings occur elsewhere.
Question 5: Which ADR forum is specifically designed for resolving domain name disputes under ICANN policy?
- The AAA Commercial Arbitration Panel
- The Uniform Domain-Name Dispute-Resolution Policy (UDRP) administered by WIPO and other providers (Correct answer)
- The FTC's consumer complaint bureau
- The USPTO trademark dispute board
Correct answer: The Uniform Domain-Name Dispute-Resolution Policy (UDRP) administered by WIPO and other providers
The UDRP provides a streamlined online ADR procedure allowing trademark owners to challenge cybersquatters and recover domain names without going to court.
Question 6: What is a 'med-arb' hybrid process?
- A process where a mediator and arbitrator both attend every session simultaneously
- A process where the neutral first attempts mediation and, if it fails, converts to binding arbitration (Correct answer)
- A form of arbitration where parties are required to mediate between rounds
- A mediation process governed by arbitration rules
Correct answer: A process where the neutral first attempts mediation and, if it fails, converts to binding arbitration
Med-arb combines the consensual nature of mediation with the finality of arbitration: the neutral tries to facilitate settlement, and if unsuccessful, issues a binding award.
ADR ADR Commercial & Consumer Dispute Resolution 1
What organization administers the Consumer Arbitration Rules specifically designed to protect consumers in the U.S.?