united-states contract-law arbitration
Can a consumer arbitration agreement be applied retroactively?
<p>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.</p>
<p>While that arbitration agreement was introduced in the context of the cardmember agreement for Account A, it appears to encompass claims about Account B:</p>
<blockquote>
<p>All claims or disputes between you and us about or relating in any
way to your account, <strong>any prior account</strong>, your cardmember
agreement with us (including any future amendments), <strong>any prior
cardmember agreement</strong>, or <strong>our relationship</strong> are referred to as
&quot;Claims&quot; 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</p>
</blockquote>
<p>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?</p>
<hr />
<p>The full agreement:</p>
<blockquote>
<p>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.</p>
<p>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.</p>
<p>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, &quot;you&quot; includes any co-applicant or authorized
user on your account, or anyone else connected with you or claiming
through you; and &quot;we&quot; or &quot;us&quot; 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.</p>
<p>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 &quot;Claims&quot; 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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>This agreement to arbitrate is governed by the Federal Arbitration
Act, 9 U.S.C. §§ 1 et seq.</p>
</blockquote>

<h2>If you accept the terms, yes</h2>
<p>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.</p>
<p>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.</p>

<blockquote>
<p>Is consumer bound to arbitrate claims concerning account A?</p>
</blockquote>
<p>That excerpt of A2 is inconclusive. Either the draftsman was sloppy or you did not include all relevant portions of the amended contract.</p>
<p>The quoted paragraph only defines the term &quot;Claims&quot;. In and of itself, it does not indicate that everything within that definition shall undergo arbitration.</p>
<blockquote>
<p>is &quot;prior&quot; relative to the signing of the original contract in 2010, or to the amendment in 2020?</p>
</blockquote>
<p>This question is somewhat unclear, but the paragraph encompasses everything between the parties. The reference to &quot;<em>our relation</em>&quot; reinforces this interpretation, since the relation might pre-exist the signing of the initial contract.</p>
<p>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.</p>

<p>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.</p>
