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

[Lisias]

4 hours ago, swjr-swis said:

Not exactly how you worded it before though. Now you're saying that it's not necessary for the Law to actually say you can do it, it can also just be inferred/implied indirectly.

There're no implied/inferred. I have the right to be alive, I need to breath to be alive, so… This interpretation is the reason because my Government is now and then sued for forced payment of some very expensive treatments by the SUS (our national health care institute) - even by forcing the SUS to a deficit. It's a hard nut to crack.

One possible counter-argument about this is that my right to be alive doesn't implies the duty of someone else to keep me alive. But that understanding would imply that someone could charge me for breathing (using your argument as reference). Well, it happens that i need to pay for water and food, and I need both to stay alive as well. Why, then, I could not be charged for breathing? And what would happen if I fail to pay such charges?

Let the games begin, this is a hard nut to crack on Civil Law - besides being bluntly pathetic on Common Law.

 

4 hours ago, swjr-swis said:

We can probably go on back and forth like this for a bit, but pretty inevitably we're going to encounter something we all take for granted as permitted that is not explicitly or indirectly mentioned in your code of laws. That's rather the eternal problem with lawmaking: you can't ever anticipate everything that people can come up with to do or try. So to say 'you can do anything as long as the law says you can' is inevitably going to leave gaps of things lawmakers forgot to think about giving people permission to do

Agreed. But they try nevertheless. It's usual that some Laws end up negating others exactly due this. And this happens all the time. So we have "levels" os Laws, so if a "inferior" law negates a "superior" one, it's plain void - besides legally declared. Terrible mess, as sometimes, a "inferior" law is only partially negated and then is enforced partially, creating some side effects that were not foresaw by the legislator.

Spoiler

If you care to check, our Constitution has 249 articles, each one with a lot of "paragraphs" (see the Article 5 I posted). Now compare to the USA Constitution.  

Currently, one of the biggest mess on our legal system due something like this is deciding if anyone can be jailed after being condemned on what we call "Justice of Second Instance". Since it's said on the Law that you have the presumption of being innocent (what's different of being considered not guilty - subtle difference, but it bites), no one should be punished until there're no possible way to be declared innocent anymore. So rich criminals that can afford long procedures on every instance of the law (we have six, IIRC) were usually delaying the final verdict until the time that the crime prescribes, and so the whole legal process is finished as is. This is changing lately, but there're still some legal battles about this "understanding".

On Common Law, such a mess is virtually impossible. The first Judge that manages to apply the new understanding creates a legal precedence, and then further decisions are bound to it. On Civil Law, every judgment is a fight about the same problem. (and this is another difference between the Doctrines, and the main reason judgments are usually bound to the strict letter of the written law - at least on my Country).

 

4 hours ago, Cheif Operations Director said:

People this is basic, in a free society atleast. A law does not authorize behavior it prohibits it.

Nope. A Law can authorize or can prohibit behaviours - these are not mutually exclusive choices.

The nature of the doctrine (Civil or Common) usually reflects on the "statutorily" nature of de laws.

Let's take another example: still guaranteed by the 5º Article:

Quote

XV -  é livre a locomoção no território nacional em tempo de paz, podendo qualquer pessoa, nos termos da lei, nele entrar, permanecer ou dele sair com seus bens;
...

LIV -  ninguém será privado da liberdade ou de seus bens sem o devido processo legal;
...
LXI - ninguém será preso senão em flagrante delito ou por ordem escrita e fundamentada de autoridade judiciária competente, salvo nos casos de transgressão militar ou crime propriamente militar, definidos em lei;

or something like: 

"the locomotion in the national territory is free in time of peace, and any person, under the terms of the law, may enter, remain or leave with his property;"

"no one shall be deprived of liberty or property without due process of law;"

"no one shall be arrested except in flagrante delicto or by written and substantiated order of competent judicial authority, except in cases of military transgression or properly military crime, as defined by law;"

Well.. What all of these legalese means? A lot, between them, that the following are plain impossible (legally) on my Country!

Spoiler

Try to do such stunt here to a reasonable informed citizen, and your shop will face some very harsh fines and damages!

If you physically lock the citizen, you can face criminal charges of unlawful incarceration.

Of course, if the citizen is innocent - you are allowed to do such to a robber (as there're some specific laws allowing it) - but for your own sake, be sure the guy is a robber.

 

Spoiler

It's plain impossible to (legally) have any property of yours arrested without due process on my country. If you can prove a cop got your money or anything else belonging to you, and you are brave enough to file a denounce, the cop is arrested. POINT.

 

For curiosity, we have another law about currency (this is a Decree-Law, it's not on the Constitution, so can be changed easier by the Government): Article 43 from "LEI DAS CONTRAVENÇÕES PENAIS" :

" Art. 43. Recusar-se a receber, pelo seu valor, moeda de curso legal no país:" ("Refusing to receive, for its value, legal tender currency in the country:").

http://www.planalto.gov.br/ccivil_03/decreto-lei/Del3688.htm

Spoiler

You refuse local cash here, you are arrested.

There's a specific law here demanding that the local currency is acceptable to finish any kind of debts. Lots of fun when you are paying something you don't agree by using tons of 1 cent coins (been there, done that! ) . Yes, they will accept the money, or they will be heavily fined.

(some very few exceptions exist)

And things goes on. Lots of "fun" about it available on the Internet, if you know the right words to search.  

 

 

4 hours ago, Cheif Operations Director said:

Is their a law saying you can  use a mouse in your left hand? Is their a law saying that you can paint your walls, is their a law saying that you can change a light bulb.

Yes.  

From the very same Article 5:

Quote

II -  ninguém será obrigado a fazer ou deixar de fazer alguma coisa senão em virtude de lei;

"II - no one shall be compelled to do or to cease doing anything other than by virtue of law;"

https://www.senado.leg.br/atividade/const/con1988/con1988_15.12.2016/art_5_.asp

This paragraph explicitly says that I'm allowed to do whatever I want and I'm allowed to DO NOT do whatever I don't want, a long there's no law saying I can't or there's a law saying I have to do it.

It's hard for Americans to understand it, as you are allowed to do whatever you want due the absence of a law saying you can't. But yet, it's exactly how things works around here.

And this is exactly what saved my sorry SAS on this OPT OUT stunt.   There's a law saying that I can't be forced to a unilateral contract (EULAs are contracts here) change without my explicit agreement. Moreover, there's yet another law plain forbidding forced arbitration to a consumer:

Quote

Código de Defesa do Consumidor, art. 51, inciso VII (Clausulas Abusivas)

Art. 51. São nulas de pleno direito, entre outras, as cláusulas contratuais relativas ao fornecimento de produtos e serviços que: 

VII ‐ determinem a utilização compulsória de arbitragem; 

"Article 51. The contractual clauses related to the supply of products and services that are:

VII - determine the compulsory use of arbitration;"

http://www.planalto.gov.br/ccivil_03/LEIS/L8078.htm

So I can't be forced to it, and that's it.

Edited April 8, 2019 by Lisias
typos! Good thing they're not illegal!

[Cheif Operations Director]

3 hours ago, Lisias said:

There're no implied/inferred. I have the right to be alive, I need to breath to be alive, so… This interpretation is the reason because my Government is now and then sued for forced payment of some very expensive treatments by the SUS (our national health care institute) - even by forcing the SUS to a deficit. It's a hard nut to crack.

One possible counter-argument about this is that my right to be alive doesn't implies the duty of someone else to keep me alive. But that understanding would imply that someone could charge me for breathing (using your argument as reference). Well, it happens that i need to pay for water and food, and I need both to stay alive as well. Why, then, I could not be charged for breathing? And what would happen if I fail to pay such charges?

Let the games begin, this is a hard nut to crack on Civil Law - besides being bluntly pathetic on Common Law.

 

Agreed. But they try nevertheless. It's usual that some Laws end up negating others exactly due this. And this happens all the time. So we have "levels" os Laws, so if a "inferior" law negates a "superior" one, it's plain void - besides legally declared. Terrible mess, as sometimes, a "inferior" law is only partially negated and then is enforced partially, creating some side effects that were not foresaw by the legislator.

  Reveal hidden contents

If you care to check, our Constitution has 249 articles, each one with a lot of "paragraphs" (see the Article 5 I posted). Now compare to the USA Constitution.  

Currently, one of the biggest mess on our legal system due something like this is deciding if anyone can be jailed after being condemned on what we call "Justice of Second Instance". Since it's said on the Law that you have the presumption of being innocent (what's different of being considered not guilty - subtle difference, but it bites), no one should be punished until there're no possible way to be declared innocent anymore. So rich criminals that can afford long procedures on every instance of the law (we have six, IIRC) were usually delaying the final verdict until the time that the crime prescribes, and so the whole legal process is finished as is. This is changing lately, but there're still some legal battles about this "understanding".

On Common Law, such a mess is virtually impossible. The first Judge that manages to apply the new understanding creates a legal precedence, and then further decisions are bound to it. On Civil Law, every judgment is a fight about the same problem. (and this is another difference between the Doctrines, and the main reason judgments are usually bound to the strict letter of the written law - at least on my Country).

 

Nope. A Law can authorize or can prohibit behaviours - these are not mutually exclusive choices.

The nature of the doctrine (Civil or Common) usually reflects on the "statutorily" nature of de laws.

Let's take another example: still guaranteed by the 5º Article:

or something like: 

"the locomotion in the national territory is free in time of peace, and any person, under the terms of the law, may enter, remain or leave with his property;"

"no one shall be deprived of liberty or property without due process of law;"

"no one shall be arrested except in flagrante delicto or by written and substantiated order of competent judicial authority, except in cases of military transgression or properly military crime, as defined by law;"

Well.. What all of these legalese means? A lot, between them, that the following are plain impossible (legally) on my Country!

  Reveal hidden contents

Try to do such stunt here to a reasonable informed citizen, and your shop will face some very harsh fines and damages!

If you physically lock the citizen, you can face criminal charges of unlawful incarceration.

Of course, if the citizen is innocent - you are allowed to do such to a robber (as there're some specific laws allowing it) - but for your own sake, be sure the guy is a robber.

 

  Reveal hidden contents

It's plain impossible to (legally) have any property of yours arrested without due process on my country. If you can prove a cop got your money or anything else belonging to you, and you are brave enough to file a denounce, the cop is arrested. POINT.

 

For curiosity, we have another law about currency (this is a Decree-Law, it's not on the Constitution, so can be changed easier by the Government): Article 43 from "LEI DAS CONTRAVENÇÕES PENAIS" :

" Art. 43. Recusar-se a receber, pelo seu valor, moeda de curso legal no país:" ("Refusing to receive, for its value, legal tender currency in the country:").

http://www.planalto.gov.br/ccivil_03/decreto-lei/Del3688.htm

  Reveal hidden contents

You refuse local cash here, you are arrested.

There's a specific law here demanding that the local currency is acceptable to finish any kind of debts. Lots of fun when you are paying something you don't agree by using tons of 1 cent coins (been there, done that! ) . Yes, they will accept the money, or they will be heavily fined.

(some very few exceptions exist)

And things goes on. Lots of "fun" about it available on the Internet, if you know the right words to search.  

 

 

Yes.  

From the very same Article 5:

"II - no one shall be compelled to do or to cease doing anything other than by virtue of law;"

https://www.senado.leg.br/atividade/const/con1988/con1988_15.12.2016/art_5_.asp

This paragraph explicitly says that I'm allowed to do whatever I want and I'm allowed to DO NOT do whatever I don't want, a long there's no law saying I can't or there's a law saying I have to do it.

It's hard for Americans to understand it, as you are allowed to do whatever you want due the absence of a law saying you can't. But yet, it's exactly how things works around here.

And this is exactly what saved my sorry SAS on this OPT OUT stunt.   There's a law saying that I can't be forced to a unilateral contract (EULAs are contracts here) change without my explicit agreement. Moreover, there's yet another law plain forbidding forced arbitration to a consumer:

"Article 51. The contractual clauses related to the supply of products and services that are:

VII - determine the compulsory use of arbitration;"

http://www.planalto.gov.br/ccivil_03/LEIS/L8078.htm

So I can't be forced to it, and that's it.

That is what I'm saying. Law restricts behavior (if no law says you can't do something you can do it)

[Lisias]

3 hours ago, Cheif Operations Director said:

That is what I'm saying. Law restricts behavior (if no law says you can't do something you can do it)

Unfortunately, I'm not managing to make myself clear. It's this way on your country, but not on my. Let me quote again our Article 5º:

Quote

XV -  é livre a locomoção no território nacional em tempo de paz, podendo qualquer pessoa, nos termos da lei, nele entrar, permanecer ou dele sair com seus bens;

"the locomotion in the national territory is free in time of peace, and any person, under the terms of the law, may enter, remain or leave with his property;"

https://www.senado.leg.br/atividade/const/con1988/con1988_15.12.2016/art_5_.asp

This law says exactly the other way around. It's explicitly telling me what I'm allowed to do, and nobody has the right to forbid me - unless explicitly defined in another Law.

Not all countries are like U.S.A. Common Law ways are not the only possible way!

[Cheif Operations Director]

3 hours ago, Lisias said:

Unfortunately, I'm not managing to make myself clear. It's this way on your country, but not on my. Let me quote again our Article 5º:

"the locomotion in the national territory is free in time of peace, and any person, under the terms of the law, may enter, remain or leave with his property;"

https://www.senado.leg.br/atividade/const/con1988/con1988_15.12.2016/art_5_.asp

This law says exactly the other way around. It's explicitly telling me what I'm allowed to do, and nobody has the right to forbid me - unless explicitly defined in another Law.

Not all countries are like U.S.A. Common Law ways are not the only possible way!

Again what is the point of this? What does this have to do with a EULA. 

Also ok I suppose on the law thing it just seems so backward 

Edited April 8, 2019 by Cheif Operations Director

[Lisias]

57 minutes ago, Cheif Operations Director said:

Again what is the point of this? What does this have to do with a EULA. 

Excellent question.  

After this wall of alien legalese, you must have some insight how things work on Countries that adopt the Rule of the Civil Law by now. Essentially, we shove the mess on the Constitution and try to live with it, while Common Law lets the Courts handling the mess and try to live with it.  

Here, on my Country, there's a Law saying explicitly that EULAs are a kind of Contract, called locally "Adhesion Contracts" - ie, you adhere to the Contract by hiring the service. I talked about it here. Being formally recognized as Contracts in my country, the EULA should follows all the pertinent legislation. Of course, assuming TTI has not an office on my country, they can't enforce anything on me except under the New York Convention. And vice versa. Fortunately for me, the Brazil's agreement to the New York Convention pushes the same Consumer and Contracts Laws, so I'm still covered by the same concepts.

The bad side is that, being an Contract, I'm bound to it - so accepting it without reading it is exactly the same as signing a formal Contract without reading it. I'll comply by will or by force, that's final. So, yeah. I read every EULA.

The good side is that, by being ruled by local legislation about Contracts (as stated on our agreement of the New York Convention), they are subject to the same local Contracts restrictions. One of these restrictions plain declares any clausule about Arbitration null and void when applied to consumers. It's just plain impossible to transfer consumer litigations to Arbitration around here, and that's final - you can write it ad nauseam on every EULA, our local Courts will just act as they weren't there. This means that if you add a clausule "You must comply with every precious clausule of this Contract", the contract is still valid - as the clausule about Arbitration are null and void, and so, doesn't exists. And so, "every previous clausule" is legally referring to all of the other ones that are still valid.

Tricky to understand when you live under the Rule of the Common Law, where all of this is… Impossible (or at least, beyond my understanding of legally possible - I'm not a lawyer, loop-holes can exist).

Now, going to the Common Law. More explicitly, to USA's Law. There's nothing on your legal system saying they can't try to force you to Arbitration by implicit agreement. The same conditions on your law that says you can do anything as long there's no law saying otherwise, applies to them too! So they are allowed to try. It's up to a Court of Law to say they can't, once a citizen decides to challenge them using the Legal System. Until there (and assuming this wasn't done yet, I don't know), you must be aware that this stunt can stick,  and so you would be forced to Arbitration. I don't know specifics about USA's Federation agreement, but AFAIK it's theoretically possible that some States can judge this unenforceable, while others could judge this enforceable.

Going back to my country, being the Contract governed by a Federal Law, it's plain impossible that this would happen around here - it's enforceable or not enforceable on the whole country, no exceptions.

Uff…  Yeah, I wrote yet another wall of text. Sorry. But… I could not manage to express myself, safely, under fewer words. I hope this is enough.  

Edited April 8, 2019 by Lisias
of cousre, a tyop!

[Lisias]

7 hours ago, Cheif Operations Director said:

Also ok I suppose on the law thing it just seems so backward 

I though on a metaphor during the day, let's see if it's a good one.

Do you know something about Color Systems? That RGB as an additive color system (as you start with black, and add colors until you get what you want), while the CMYK is a subtractive color system (as you start with white, and subtract colors until you get what you want)?

Think the Common Law as a "subtractive legal system". You start with all the possible rights imaginable, and then some laws/jurisprudences subtract some behaviours until you get the Society you think you want.

And think Civil Law as an "additive legal system", where you starts without any right, and then adds rights until eventually, you get the Society you think you want. It only happens that you can also subtract some rights after adding broader ones in a recursive entanglement of laws. What can be really messy sometimes...

[Plusck]

On 4/9/2019 at 5:15 AM, Lisias said:

Think the Common Law as a "subtractive legal system". You start with all the possible rights imaginable, and then some laws/jurisprudences subtract some behaviours until you get the Society you think you want.

And think Civil Law as an "additive legal system", where you starts without any right, and then adds rights until eventually, you get the Society you think you want. It only happens that you can also subtract some rights after adding broader ones in a recursive entanglement of laws. What can be really messy sometimes...

I'm sorry but this really isn't true. It's also not very relevant to the question of arbitration for consumer contracts...

What you've been talking about (such as that Article 5 you quoted) are consitutionally protected rights. They exist in all legal systems in one form or another. Often referred to as fundamental rights and freedoms, human rights and so on.

It is absolutely not true to say that you don't have these rights if they don't appear in your constitution or some other document. They exist as such. There is a whole slew of philosophies, and especially legal philosophies, that try to provide a logical basis to what most people would call "common sense": the right to breathe, move around, speak to people and so on. The whole issue of "natural law" tries to deal with this, but there are plenty of ways of attacking the logic of each of these philosophies, so there is definitely no consensus there.

And that lack of consensus as to how to determine your basic rights is exactly what prompts this sort of consitutional provision: your freedom of movement is desirable; you cannot be certain that future governments won't try to limit it unreasonably based on some odd logic; therefore you enshrine that right in your constitution. There is no way you can claim that enshrined rights exist where others don't (which is basically what your subtractive/additive comparison is saying); however it is certainly true that unenshrined rights can be much more easily taken away from you.

And the US is a perfect example of a common law system where the enshrined rights (additive, in your terms) form a huge part of the ordinary non-lawyer person's understanding of his "rights". The first, second, fourth and fifth amendments to the US constitution are constantly mentioned, cited, debated, argued, challenged and asserted by non-lawyery people both inside and outside the US.

Still, to get back on topic ...

There are two issues to this whole consumer arbitration thing.

- conflict of laws: part of "international private law" which is only "international" in that it deals with a domestic legal system's approach to dealing with international subjects. This breaks down into rules on choice of law, and rules on jurisdiction and enforcement. Arbitration comes into it as it can have a complicated relationship with both choice of law and jurisdiction.

- unfair contract terms: part of the protective laws of all legal systems, but with vastly differing rules from one system to another.

One of the most important questions that runs through both issues is "are you acting in an informed professional capacity?". If yes, then many of the protective provisions in both areas (privilege of jurisdiction, for example, which consumers certainly have, employees may have, and mere citizens of some States may also have) no longer apply. If not, then there are lots of rights that you cannot easily sign away, even if someone clearly tells you that will do so by signing or clicking a link or whatever.

So under European Regulations, you can freely choose a foreign law but that will never exclude the "mandatory provisions" of the laws of your place of residence - and protecting consumers from arbitration clauses is one of those mandatory provisions for many countries, including Germany, France and probably the UK). You can give jurisdiction to a foreign court but a non-professional's privilege of suing a professional before his home courts may be protected. You can agree to arbitration after a dispute arises but, in many legal systems, never beforehand if you are a consumer. And purporting to add a clause to a contract with a non-professional that contradicts these rights is, again in many but not necessarily all legal systems, simply null and void.

And as the VKI v Amazon case shows, trying to impose your own preferred laws on a European consumer to the exclusion of all others is itself misleading and therefore an unfair contract term. So by doing so, you fail and you also get "misleading consumers" tacked on to your reputation...

Incidentally, the New York Convention is fairly irrelevant. Yes, it is the basis by which arbitration as such is recognised internationally as a form of dispute settlement and therefore allows international enforcement... but it cannot affect the question of whether it is even possible for a person to consent to arbitration. In much of Europe (maybe all?), the answer is no, as a consumer you cannot consent to arbitration before the fact, and quite possibly not after the fact either.

Edited April 10, 2019 by Plusck

[Lisias]

7 hours ago, Plusck said:

I'm sorry but this really isn't true.

Citation needed.  

7 hours ago, Plusck said:

What you've been talking about (such as that Article 5 you quoted) are consitutionally protected rights. They exist in all legal systems in one form or another. Often referred to as fundamental rights and freedoms, human rights and so on.

Non sense. Countries are sovereign in this aspect [and to any other, to tell you the true], the Human Rights Bill are a protocol of intentions - you only have, in fact, the rights your country's Constitution says you have [or explicitly says you don't - see USA's]. I will not go into politics here due obvious reasons, but I suggest a little research about how some few oil rich countries that are members of the ONU handles such rights internally.

7 hours ago, Plusck said:

If not, then there are lots of rights that you cannot easily sign away, even if someone clearly tells you that will do so by signing or clicking a link or whatever.

Non sense. See the videos I posted above, your [whole!] argument just doesn't stands.

Different Countries, different cultures, different legal systems. It's just like this.

Edited April 10, 2019 by Lisias
typo and an additional remark to better clarify the idea (in italics)

[Lisias]

6 hours ago, Plusck said:

Incidentally, the New York Convention is fairly irrelevant. Yes, it is the basis by which arbitration as such is recognised internationally as a form of dispute settlement and therefore allows international enforcement... but it cannot affect the question of whether it is even possible for a person to consent to arbitration.

Dude, I really advise you to hire a consultant about International Affairs.

I lack the knowledge to proper educate you on the matter, I can only repeat here what was told to me - and what was told me is that without a Legal Agreement (as the New York Convention, but be aware than additional agreements are possible), you just can't sue anyone from another country (not even a country mate living overshores), and if you can't sue them, any agreement (as a License) is dead letter.

Hire a professional on the field. I'm already over my head here, there's little to nothing I could add to the discussion.

Edited April 10, 2019 by Lisias
emphasis

[Space Kadet]

On 4/8/2019 at 2:20 AM, Lisias said:

That only worked that exact way because that Company you sued had an Office on your Country (or at least on EU).

 

no they didnt. , AND the 'or at least in the eu' statment shows you literally know nothing about how the legal systems operate in the EU. 

AGAIN, i know what im talking about, im not going under what i googled to win an argument. as you keep quoting things THAT ARE NOT THE LAW! 


 

[Lisias]

3 hours ago, Space Kadet said:

no they didnt. , AND the 'or at least in the eu' statment shows you literally know nothing about how the legal systems operate in the EU. 

AGAIN, i know what im talking about, im not going under what i googled to win an argument. as you keep quoting things THAT ARE NOT THE LAW! 

Dude… If you or your lawyer didn't had to send a letter rogatory (between other measures), then the defendant must be accessible in your own country (or within the EU, I don't know how litigation works inside EU).

You just can't sue a foreign citizen or company outside your country using your local laws. You are not telling us the whole history.

— POST EDIT --

This is what I found about "Cross-border Civil Litigation in the European Union"

http://ec.europa.eu/civiljustice/publications/docs/guide_litiges_civils_transfrontaliers_en.pdf

Would you care to explain to us how did you proceeded on the matter?

Edited April 11, 2019 by Lisias
hit "Save" too soon.