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Second Circuit finds American Express’s mandatory arbitration clause unenforceable for merchants

 |  February 1, 2012

The U.S. Court of Appeals for the Second Circuit has ruled that American Express’ mandatory arbitration clause with merchant customers is unenforceable. The clause, included in contracts since 1999, requires merchants to waive the right to sue American Express in a class action.

The court determined that Concepcion was inapposite to this case because the merchants had no economic incentive to pursue individual arbitration, given that the cost of hiring experts would outweigh the possible damages awarded.

Source: Thomson Reuters News


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