Forced Arbitration Agreement - What is it? Why? Opt-Out Letter Template

[Poodmund]

What is a Forced Arbitration Clause?

A forced arbitration clause is a clause entered into a contract that requires the parties to resolve their disputes through an arbitration process, outside of the court of jurisdiction, by a third party. By agreeing to the EULA, it will be stated that you are forced to agree to this arbitration clause by the terms set in the EULA.

Why would Take Two want to enforce this?

By enforcing all players and forum goers to this agreement a dispute that a consumer may have is deprived of the right to access the public court system. This denial of that access - without you being able to make a meaningful voluntary choice to surrender that right - could potentially be a significant loss on a personal level depending on the situation, for example, if your Add-On license was being violated by Take Two or if you had a monetary dispute outstanding. Ensuring that all consumers waive the right to push these disputes to the public court system and instead settle disputes with a third party arbitrator has historically favoured the party with the most money to throw at the issue... i.e. its generally easier for the bigger, wealthier party to make a dispute dissapear.

*Shaking my pitchfork* "So it seems Take Two are the Devil and are taking away my rights!"

Well, kinda, yes, but so are a plethora of other businesses such as Amazon, eBay, Netflix, EA, Snapchat... etc. etc. the list goes on (just look at a short list of these companies: Link). Its almost standard practice for large businesses to enforce this agreement on its consumers as it heavily favours the enterprise in a dispute.

"Meh, I don't care, I have nothing to complain about so this won't have a meaningful affect on me..."

In reality you are most likely correct. Business will continue as usual just as it has been for years here with Kerbal Space Program and on these forums.

"... but what if something were to go awry?"

Well, come the EULA change, you won't have much of a leg to stand on unless you have pockets deep enough to take on Take Two Interactive if you so desired in a legal battle, however, if you submit an Opt-Out of the Forced Arbitration Agreement you could instead take your case to a public court and let them handle the case for you in a more grounded manner.

"So how do I opt-out of this agreement?

As stated elsewhere, "if you do not want to participate in arbitration, there is an opt out period of 30 days starting from the day of the change’s implementation on March 15, 2019. In order to opt out, a written notification must be mailed to Take Two Interactive Software, Legal Department, Attn: Arbitration Opt Out, 110 West 44th Street, New York, New York, 10036. The notice must include (1) your full name; (2) your mailing address; and (3) a clear statement that you do not wish to resolve disputes with the Company through arbitration. You are responsible for ensuring the Company’s receipt of your opt-out notice, and you therefore may wish to send a notice by means that provide a written receipt."

If you feel that you want to opt-out of this agreement, please feel free to view, download, edit and send off an opt-out notice using this template as a guide for you to create your letter. It is not by any means exhaustive but should give you a basis to work from: Arbitration Agreement Opt-Out Letter Template

If you do decide to issue a declaration to opt-out, I would absolutely recommend sending your letter via a recorded delivery service to ensure that you have confirmation of your sending and confirmation of receipt of your letter.

------------------------------

I'm sure some forum members may discuss the ins and outs of this topic below but I just felt that the consumers here (us) should get a little more explanation as to what the EULA change announcement actually entails rather than a short snippet of text.

[KerbalKore]

how would i aquire my Take Two USer ID?

 

[Deddly]

In reality, who could afford a lengthy court battle, anyway? I'm pretty sure TakeTwo could afford a better lawyer than I could.

[Poodmund]

It would basically be any forms of registration you have for any accounts you have associated with T2. For example, your KSP Forum username, a Grand Theft Auto Social Club username, Civilization 5 account username etc.

Just now, Deddly said:

In reality, who could afford a lengthy court battle, anyway? I'm pretty sure TakeTwo could afford a better lawyer than I could.

Not me... that's why you try to not put yourself into that position in the first place.  

[KerbalKore]

Thanks

 

[FleshJeb]

5 minutes ago, Deddly said:

In reality, who could afford a lengthy court battle, anyway? I'm pretty sure TakeTwo could afford a better lawyer than I could.

Put another way: "Sign away your Constitutional rights because you can't afford them." THAT's the problem--Arbitration is just a band-aid.

There's one reason that corporations are hot for binding arbitration, and it isn't because it's consumer-friendly. A NON-binding arbitration clause could benefit the consumer.

[HebaruSan]

25 minutes ago, Deddly said:

In reality, who could afford a lengthy court battle, anyway? I'm pretty sure TakeTwo could afford a better lawyer than I could.

The two words every company fears most are: "class action". If thousands of other individuals share the same harm, lawyers sometimes agree to represent them for a percentage of the winnings.

[Deddly]

It seems that these clauses don't have much power in Europe.

Quote

European Union Council Directive 93/13 on Unfair Terms in Consumer Contracts creates a rebuttable presumption that pre-dispute arbitration clauses in consumer contracts are invalid. The reason is the unequal bargaining power between the contracting parties in consumer contracts.

...

Some EU member states go even further than the Directive in protecting consumers. In the UK, arbitration clauses are presumed unfair if the amount at issue is less than £ 5000.[23] France prohibits consumer arbitrations all together in purely domestic disputes.[24] In Sweden, arbitration clauses are prohibited generally in contracts concerning the sale of goods or services for private use.[25] Germany won’t enforce a consumer arbitration clause unless it is in a separate, signed document or part of a fully notarized contract.[26]

Source

Either way, anyone who feels that this is an important issue should opt out. Otherwise, it seems unlikely that this means any actual change for us players.

[The Aziz]

Yeah, I'm not going to send a physical letter from Europe to some place in teh US, just because I don't like the... whatever they're talking about there, something about courts and disputes?

[herbal space program]

...I was trying to fathom what harm I could possibly claim over KSP or the use of this forum, but I suppose if all the users sued over lost productivity from not being able to stop playing and/or talking about the game, that would be a pretty significant class! 

Edited March 12, 2019 by herbal space program

[Phreakish]

1 hour ago, HebaruSan said:

The two words every company fears most are: "class action". If thousands of other individuals share the same harm, lawyers sometimes agree to represent them for a percentage of the winnings.

It's worth noting that forced arbitration waives the right to sue, even in a class action. It holds both parties hostage to the arbitration process and a resolution MUST be reached within that process. 

That said, the point of arbitration if often to reach the same conclusion a trial would but in a more expedient manner. The discovery process for a trial alone can be a burden no one would want to bear. I'm no lawyer, but I've been through arbitration and found it to be a reasonable compromise compared to the more formal requirements of a trial. 

[soulsource]

I'm rather certain such clauses in an EULA aren't legal and therefore void in many countries.

Edit: "The EU requires Member States’ courts to presume that the arbitration agreement in consumer contracts is an unfair term, if it was not individually negotiated by the parties after the dispute arose" - http://arbitrationblog.kluwerarbitration.com/2016/02/25/consumer-arbitration-will-the-two-different-worlds-across-the-ocean-converge/

Edited March 12, 2019 by soulsource

[scottadges]

8 minutes ago, Phreakish said:

a reasonable compromise compared to the more formal requirements of a trial

Also, I'm not lawyer and I couldn't play one on TV... but this seems reasonable, especially if you're talking about not having to HIRE a lawyer to represent you through a court process.

But honestly, what kind of damages would you ever incur via a video game that would justify thousands-upon-thousands of dollars for a lawyer to go to trial? 

I guess I'm not sure why people are up in arms about this?

[HebaruSan]

33 minutes ago, Phreakish said:

It's worth noting that forced arbitration waives the right to sue, even in a class action.

Exactly.

[Phreakish]

5 minutes ago, scottadges said:

... especially if you're talking about not having to HIRE a lawyer to represent you through a court process.

To be fair, arbitration isn't free. You're one-on-one with someone who is usually (but definitely not always) an ex-judge. Someone used to getting paid more per hour than a trial attorney, and who's often got decades of bench experience. Cheap is not a term I'd associate with the process, and unless damages are provable and substantial - the costs are typically shared. Both parties wind up with significant skin in the game. Versus a trial situation where it's possible in some circumstances to obtain council on contingency (meaning they only get paid if you win, but there's still often smaller costs in the meantime). It's a trade-off.  Whether it's a good path or not depends very much on the dispute at hand.

People get up in arms about it because it's a principle matter. No one likes giving up freedoms for any reason, especially when not given an alternative and the choice is made effectively made for them. Requiring forced arbitration is a good way to kill an arms length deal between two parties, but it's really hard for 'the masses' to negotiate it away when it's part of the entrance fee for employment or use of a good or service (including entertainment). 

At the same time, there's always potential for damages. Who knows what the long term plans for the game and software includes? It's always possible for companies to get hacked, for credit card or payment information to be leaked, for personal details to be leaked, for bugs to allow unauthorized use or access to computers, etc. It's not hard to imagine a situation where one might have their credit card info used fraudulently due to a data security breach - and then comes the argument for who's responsible. Such a breach would undoubtedly affect large numbers of users - forcing them to arbitrate individually can take significantly longer and result in much lower damage recovery than a class-action suit. Especially if the per-person damages are fairly small (but add up to a lot). 

 

[FleshJeb]

23 minutes ago, scottadges said:

not having to HIRE a lawyer to represent you through a court process.

If you're going through arbitration you'd be a fool not to hire a lawyer.

23 minutes ago, scottadges said:

what kind of damages would you ever incur

Examples:

• Modders getting their work stolen/license violated by Take Two. (I would hope that most modders send in the opt-out form.)
• Poor/negligent coding could potentially damage other files, or leave you vulnerable to a malware attack.
• Privacy violations/selling of user data not explicitly outlined in the EULA. Any violations by Take Two of the EULA.

There are plenty of fantastic reasons for consumer protections to exist--The issue is that the clause is binding by default and not optional by default.

If any modders need help paying the postage to send a certified letter, I'll be happy to cover it.

[Chakat Firepaw]

3 hours ago, Phreakish said:

That said, the point of arbitration if often to reach the same conclusion a trial would but in a more expedient manner.

While that is the reason people with an existing dispute would go to arbitration, that generally isn't why companies put, (often legally void), arbitration clauses in contracts.  The reason many companies do it is to either force, (if the clause is enforceable), or trick, (if it isn't), people with a dispute into bringing it before an arbiter of the _company's_ choosing.  You might be surprised¹ but there is a history of companies choosing arbiters who happen to be predisposed to rule against the consumer.

 

1: If you are the kind of person surprised at traffic lights changing.

[Cheif Operations Director]

I remember when this first happened and half of the people then said everything was fine... Oh how things have changed. This is insane on many levels I'm not sure I'm updating past the current version. Sorry SQUAD ( At this point Take Two ) I like your product but I'm not going to court of this absurdity. 

Anyone know how to prevent auto updates on steam?

May I add that this 30 day period is ridiculous, I mean why do we as some others have pointed out have to pay to opt out of your program. Why do we the customer have t rely on the useless mail system to protect ourselves from your legal nonsense.   

[Cheif Operations Director]

I mean all we are asking for a little decency? 

 

Perhaps a small amendment to your EULA for non forced arbitration, not counting on it but it would be nice.

As a point if we all do not accept the EULA then it does not matter does it? I mean they can not amend a contract after we agree to it which means if we all decline the new EULA then we don't need to worry about it? I'm a missing something,  I'm not a lawyer is this true?

Edited March 13, 2019 by Cheif Operations Director

[Superfluous J]

1 hour ago, Cheif Operations Director said:

I remember when this first happened and half of the people then said everything was fine... Oh how things have changed.

What changed?

[klgraham1013]

4 hours ago, 5thHorseman said:

What changed?

The loading screen.

[Superfluous J]

24 minutes ago, klgraham1013 said:

The loading screen.

Oh I thought it was something important.

[klgraham1013]

16 minutes ago, 5thHorseman said:

Oh I thought it was something important.

It depends if you care about your rights or not.

[Cheif Operations Director]

7 hours ago, 5thHorseman said:

What changed?

If they have a problem with you they are as my understanding goes they deny the ability to use the court system. Instead you have to use an the arbitration system. 

Edited March 13, 2019 by Cheif Operations Director

[Space Kadet]

so there is a big point being missed here, eula's in the current incarnation are actually not exactly legally binding. in europe and america all it takes to say you didnt agree to it would be reasnable cause to show you hadent understood that what was in it. this could be in the form of the thousands of stories, jokes, and examples of people just clicking yes to an agreement without reading it. for instance the fact it took years for anyone to report that rockstars Eula once said they owned your soul if you agreed, so this company actually knows people dont read their eula, therefor they know that you cant be held accountable.

second is the fact they have massivly changed the eula from the origional, so the argument could also be made that you read and agreed to the first one, but not to any consiquential additions. this way there is actual precident for in the US,  the case  Rodman v. Safeway, Inc. actually set the precident that without them notifying you personally you dont have to abide by their terms. and just clicking on an"agree or you aint playing our game" isint enough to show you agree with the terms.

now on a reperate case in the US  Douglas v. Talk America the court actually said that parties must consent to the new terms. so between these two cases you have presedent that says you must be personally notified and that just clicking a box saying agree isint enough to prove you have agreed to all the terms and conditions. this means that the new take 2 EULA isint legally binding, unless they can prove you have read the new one! 

now if you live in europe there is actually a law prohibiting unfair contract terms, that basically means they cant change the terms on something you have bought. Kerbal isint a servace its a product sold on hard copy, their for regardless of future updates to this game, the new EULA means nothing. so forinstance, if they put in a data harvesting thing in an update to gain information about your system. providing you bought the game before the TAKE 2 eula was active then they cant do that to you because you bought the game prior to this happening. Its akin to taking your car in for a servace and it coming out only being able to runn on a special fuel, you ddint ask for that change, so they cant change something you bought without your EXPRESS permission. again, clicking a box they is known no one reads is not binding. but on top of that there is a burden of proof in the EU that essentually overturns EULA's because they cant prove you have read it. essentualy it is that a contract must have a signature, and clicking a box is not classed as an electronic signature. hope this helps you, and remember dont read the EULA :p its not worth the paper its printed on!!! see what i did there.