USA Law and Practice Contributed by: John Desmond, Alexis Taitel, Alice Samberg, Mackenzie Robinson and Peter Dragovich, Dickinson Wright PLLC
tive action or to refrain from doing so. Declaratory relief consists of a court declaring a party’s rights. An example of declaratory relief is if a court declares that Parcel X belongs to Party A, while Parcel Y belongs to Party B. Lastly, restitution and disgorgement are two sides of the same coin and are used to prevent the unjust enrichment of one party to the detriment of another. 2.8 Damages Expert testimony is typically used to assess the extent of a party’s damages. In some states, property own- ers may opine about the value of their own property. The main types of monetary damages are compensa- tory, punitive, nominal, and liquidated. Compensatory damages are meant to make an injured party whole. Punitive damages are intended to punish a party for particularly egregious conduct. Nominal damages are used when a party committed some wrong but the precise financial loss has not been or cannot be proven. And liquidated damages are those that par- ties agree to by contract, in anticipation of a potential lawsuit. For instance, parties may agree that a breach of their contract entitles the non-breaching party to liquidated damages in the amount of USD100,000. This takes the guesswork out of a damages calcu- lation and narrows the scope of issues that a court must determine, which ultimately conserves the par- ties’ resources. Arbitration is broadly permitted under the Federal Arbitration Act (FAA). Many states have adopted legal frameworks similar to the FAA as well. Arbitra- tion is prevalent throughout the United States but is particularly common within certain categories of dis- putes, especially consumer and employment. This is because consumer and employment contracts tend to be standardised and developed by companies that wish to streamline their processes, including the potential risks of legal action. Rather than having to litigate in a variety of forums or jurisdictions under dif- ferent rules and procedures, companies that choose to mandate arbitration gain more control and predict- ability over potential disputes that may arise. Courts 3. Arbitration 3.1 Prevalence
tend to enforce mandatory arbitration clauses, unless they are deemed unconscionable. 3.2 Restrictions on Use of Arbitration Arbitration clauses in contracts will not be enforced if they are deemed unconscionable – that is, shock- ingly unfair or excessive. But by and large, arbitration clauses are enforced. When seeking to get around an arbitration clause, many plaintiffs make the argument that there was uneven bargaining power amongst the parties when the contract was negotiated and exe- cuted, meaning that the less powerful party (typically a consumer or employee) did not have a truly equal opportunity to negotiate with the more powerful party over certain contractual terms or provisions. Courts tend to reject such arguments, so plaintiffs must care- fully review agreements containing mandatory arbi- tration clauses, as they will more likely than not be enforced. There is a growing trend to exclude certain types of cases from mandatory arbitration, including some class-action lawsuits and employment disputes aris- ing out of alleged sexual harassment or other forms of discrimination. 3.3 Advantages of Arbitration One of the perceived advantages of arbitration is that it tends to move much quicker than litigation, providing parties with swifter resolutions to their dis- putes. Many contracts – namely, in the consumer and employment contexts – contain mandatory arbi- tration provisions that require parties to arbitrate any disputes before initiating litigation. These provisions are typically enforced by courts, especially by federal courts through the Federal Arbitration Act (FAA). Arbitration provisions provide parties with some assurances that the threat of litigation does not. For instance, the public is not entitled to access arbi- trations in the same way that the public has a pre- sumption of access to court proceedings and filings. Choosing to engage in arbitration protects parties’ privacy interests. Additionally, while arbitration is not inexpensive by any means, it typically ends up being less expensive than litigation. This is because, by and large, there tends to be less motion practice in arbitra- tions, and the discovery periods are often shorter than
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