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A consumer has two credit card accounts with a bank: Account A (opened in 2010) and Account B (opened and closed in 2017). In 2019, the bank amends the cardmember agreement for Account A to introduce an arbitration agreement.

While that arbitration agreement was introduced in the context of the cardmember agreement for Account A, it appears to encompass claims about Account B:

All claims or disputes between you and us about or relating in any way to your account, any prior account, your cardmember agreement with us (including any future amendments), any prior cardmember agreement, or our relationship are referred to as "Claims" for purposes of this agreement to arbitrate [...] All Claims are subject to arbitration whether they arose in the past, may currently exist, or may arise in the future [...] Arbitration will apply even if your account is closed

As a matter of contract interpretation, i.e. assuming there is no dispute about the formation of the arbitration agreement, does it apply to claims about Account B?


The full agreement:

This arbitration agreement provides that all disputes between you and [Bank] must be resolved by BINDING ARBITRATION whenever you or we choose to submit or refer a dispute to arbitration. By accepting this arbitration agreement you GIVE UP YOUR RIGHT TO GO TO COURT (except for matters that may be taken to a small claims court). Arbitration will proceed on an INDIVIDUAL BASIS, so class actions and similar proceedings will NOT be available to you.

YOU HAVE THE RIGHT TO REJECT THIS AGREEMENT TO ARBITRATION, BUT IF YOU WISH TO REJECT IT, YOU MUST DO SO PROMPTLY. If you do not reject this agreement to arbitration by [opt-out date] in the manner set forth below, then: * In arbitration, your rights will be determined by a NEUTRAL ARBITRATOR and NOT A JUDGE OR JURY. * The procedures in arbitration are simpler and more limited than rules applicable in court. * Arbitrator decisions are subject to VERY LIMITED REVIEW BY A COURT.

If you do not reject this agreement by [opt-out date], you or we may elect to resolve any Claim by arbitration. For purposes of this agreement to arbitrate, "you" includes any co-applicant or authorized user on your account, or anyone else connected with you or claiming through you; and "we" or "us" includes [bank], all of their parents, subsidiaries, affiliates, successors, predecessors, employees, and related persons or entities and all third parties who are regarded as agents or representatives of us in connection with the account, or the subject matter of the claim or dispute at issue.

All claims or disputes between you and us about or relating in any way to your account, any prior account, your cardmember agreement with us (including any future amendments), any prior cardmember agreement, or our relationship are referred to as "Claims" for purposes of this agreement to arbitrate. Claims include, for example, claims or disputes arising from or relating in any way to transactions involving your account; any interest, charges, or fees assessed on your account; any service(s) or programs related to your account; any communications related to your account; and any collection or credit reporting of your account. Claims also include claims or disputes arising from or relating in any way to advertising and solicitations, or the application for, approval, or establishment of your account. Claims are subject to arbitration regardless of whether they are based on contract, tort, statute, regulation, common law or equity, or whether they seek legal or equitable remedies. All Claims are subject to arbitration whether they arose in the past, may currently exist, or may arise in the future. Arbitration will apply even if your account is closed, sold, or assigned; you pay us in full any outstanding debt you owe; or you file for bankruptcy. In the event that your account is sold and/or assigned, we retain our right to elect arbitration of Claims by you and you retain your right to elect arbitration of Claims by us.

If you are covered by the Military Lending Act, then you are not bound by this arbitration agreement, and to the extent required by the Military Lending Act, nothing in this agreement will be deemed a waiver of the right to legal recourse under any otherwise applicable provision of state or federal law.

The only other exception to the arbitration requirement is that you have the right to file and pursue a Claim in a small claims court instead of arbitration if the Claim is in that court’s jurisdiction and proceeds on an individual basis.

If you initiate a Claim in arbitration, no changes to the terms of this agreement to arbitrate that are made after we receive your Claim will apply to that Claim.

This agreement to arbitrate is governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.

3 Answers 3

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If you accept the terms, yes

The bank has proposed a change to your contract, you can either accept that change or reject that change. The wording of the change has given very clear instructions on how it can be rejected.

So, how can it be accepted? Well, acceptance can be by deeds as well as words so if you continue to use your accounts after the date for rejection, then you will have accepted the change.

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  • Are there any contract interpretation/construction principles that lead you to this result, or is it obvious on its face that the agreement covers both accounts? It seems obvious to me that the agreement covers all accounts. But believe it or not, the bank argued that the agreement does not cover both accounts (counter-intuitively, it is in the bank's best interest that the new agreement not apply). Jun 20 at 14:21
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Is consumer bound to arbitrate claims concerning account A?

That excerpt of A2 is inconclusive. Either the draftsman was sloppy or you did not include all relevant portions of the amended contract.

The quoted paragraph only defines the term "Claims". In and of itself, it does not indicate that everything within that definition shall undergo arbitration.

is "prior" relative to the signing of the original contract in 2010, or to the amendment in 2020?

This question is somewhat unclear, but the paragraph encompasses everything between the parties. The reference to "our relation" reinforces this interpretation, since the relation might pre-exist the signing of the initial contract.

Although a customer might opt to litigate a matter that ensued prior to signing the contract in 2010, chances are that the matter is superseded by the contract and/or the statute of limitations has expired.

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  • I edited to include a more full excerpt and a more concrete scenario. Later down is "All Claims are subject to arbitration whether they arose in the past, may currently exist, or may arise in the future." I do see your point about "our relationship". I wonder, for sake of argument, what the answer would be if that phrase was not present? Jul 10, 2021 at 0:25
  • @JoshJohnson "Later down is "All Claims are subject to arbitration whether they arose in the past". Then this means that customer's matter regarding account B is also subject to arbitration because the definition of "Claims" includes "any prior account", and account B is customer's prior account. "what the answer would be if that phrase was not present?" Regarding account B, the answer is the same. The term "our relationship" encompasses other matters short of --or other than-- contractual, such as quasi-contract issues, torts, or matters of equity. Jul 10, 2021 at 12:14
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A contract cannot be unilaterally modified, though at times it seems that way. The business can propose a modification of the contract, and the customer can accept or reject the proposal. If they accept the proposal, the contract continues under the new terms, otherwise the contract terminates. But in the case of contract B, the contract is already terminated, and the customer has no option of accepting or rejecting the amendment. The business cannot forcefully resuscitate a dead contract to force an accept / reject choice on a customer. The contract, in its state as of the termination, is what governs subsequent litigation.

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