4 ms·

Can you explain why?

PeterisP 10y ago
EU consumer rights laws state that such clauses are not valid in consumer contracts, and that's it, no contract can change that. e.g. EU directive on unfair terms in consumer contracts back from 1993 (implemented in relevant national laws separately in each country) http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31993L0013&from=EN http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX... : Article 3-1 "A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer" Article 6-1 "Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms." ... and from the examples of terms considered unfair per se: "(q) excluding or hindering the consumer s right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions" You can have dispute resolution by arbitration in most cases, but you can't mandate dispute resolution only by arbitration, you can't waive the right to sue.
- d_theorist 10y ago
  Thanks, very interesting. I wonder, though, if there might be an argument from Lyft to the effect that, since both sides are waiving their right to the courts, that the clause does not cause an "imbalance in the parties' rights", and is therefore not "unfair". It might be clearer if the protection was not couched in terms of "fairness", but simply declared mandatory arbitration clauses invalid in all circumstances. This is all merely idle speculation on my part though, I have absolutely no expertise in this.
  - PeterisP 10y ago
    The last part resolves that, the law explicitly lists that "excluding or hindering the consumer's right to take legal action" in general, and also "requiring the consumer to take disputes exclusively to arbitration" are unfair terms. The "fairness" part is because the same articles apply to a non-exhaustive (!) list of many, many other types of contractual clauses; coincidentally, most of the things listed as unfair and prohibited by this directive seem standard practice in USA contracts.
WJW 10y ago
To expand on the reasons for this a bit: In most/all EU countries "the" law is divided into public and private law. Private law regulates interactions between people (and "people-like" agents like some types of businesse). Public law regulates interactions between people and the state. Public law takes precedence over private agreements. As an example: you can make an private law agreement to let someone else take your house in exchange for an agreed upon amount of money (otherwise known as selling it). However, you can not make a private law agreement to sell yourself into slavery, because slavery is prohibited by public law and this public regulation overrides the right to sell things that belong to yourself. Similarly, it is legal to hire someone to take away stuff in your garage, but it is not legal to hire an assassin to take your life, since the public law on murder prohibits that transaction. In this specific case, it is not legal to sign a private law agreement with Lyft to waive your rights to resolution in court, since public law states that the parties have a right to resolution in court. The EU directive on unfair terms in consumer contracts is based on this legal principle and makes it more specific for consumer contracts.
- d_theorist 10y ago
  Ah, very nice. I like this explanation. Thanks. From a bit of random googling, it seems that this private/public law principle extends to common law countries, which would include the US. However, it appears that the US may have amended the public law to the effect that mandatory arbitration clauses are acceptable, whereas the EU has gone the other way and made their invalidity more explicit.
  - user5994461 10y ago
    A contract cannot substitutes itself to the law, unless the law allows it. There are basically two sets of contracts laws in EU. One for company-to-company and one for company-to-consumers. The consumers laws are very protective for the consumers, because they are very vulnerable. For instance, for most contracts you're handed a standard paper and you can't set any term. Thus the law forbids many many terms, and an illegal term cannot be enforced (either the term is voided OR the full contract is voided), like the one that allegedly give up your right to sue in front of a judge. The company-to-company contracts have a lot more room for negotiations. It's assumed that companies are negotiating and equal footing and that they should do their due diligence, no excuse.
HenryBemis 10y ago
In a nutshell the EU policy is: 1. Constitution (where there is one) 2. Laws, Regulations (e.g. Central Banks) 3. Contract Simple scenario: So even if one signs a contract for "breaking a leg in the workplace and not reporting it", that clause is moot. It may even invalidate the contract in its entirety for being against Constitution/ Laws/ Regulations. So if you break a leg in the workplace, there is a law for that, which will auto-kick-in (pun intended) (investigations, responsibility/accountability assigned), thus the specific contractual clause will not "hide" the employers or the employee's negligence (depending on your imaginary scenario) or even the fact.

EU consumer rights laws state that such clauses are not valid in consumer contracts, and that's it, no contract can change that. e.g. EU directive on unfair terms in consumer contracts back from 1993 (implemented in relevant national laws separately in each country) http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31993L0013&from=EN http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX... : Article 3-1 "A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer" Article 6-1 "Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms." ... and from the examples of terms considered unfair per se: "(q) excluding or hindering the consumer s right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions" You can have dispute resolution by arbitration in most cases, but you can't mandate dispute resolution only by arbitration, you can't waive the right to sue.

d_theorist 10y ago
Thanks, very interesting. I wonder, though, if there might be an argument from Lyft to the effect that, since both sides are waiving their right to the courts, that the clause does not cause an "imbalance in the parties' rights", and is therefore not "unfair". It might be clearer if the protection was not couched in terms of "fairness", but simply declared mandatory arbitration clauses invalid in all circumstances. This is all merely idle speculation on my part though, I have absolutely no expertise in this.
- PeterisP 10y ago
  The last part resolves that, the law explicitly lists that "excluding or hindering the consumer's right to take legal action" in general, and also "requiring the consumer to take disputes exclusively to arbitration" are unfair terms. The "fairness" part is because the same articles apply to a non-exhaustive (!) list of many, many other types of contractual clauses; coincidentally, most of the things listed as unfair and prohibited by this directive seem standard practice in USA contracts.

WJW 10y ago

To expand on the reasons for this a bit: In most/all EU countries "the" law is divided into public and private law. Private law regulates interactions between people (and "people-like" agents like some types of businesse). Public law regulates interactions between people and the state. Public law takes precedence over private agreements. As an example: you can make an private law agreement to let someone else take your house in exchange for an agreed upon amount of money (otherwise known as selling it). However, you can not make a private law agreement to sell yourself into slavery, because slavery is prohibited by public law and this public regulation overrides the right to sell things that belong to yourself. Similarly, it is legal to hire someone to take away stuff in your garage, but it is not legal to hire an assassin to take your life, since the public law on murder prohibits that transaction. In this specific case, it is not legal to sign a private law agreement with Lyft to waive your rights to resolution in court, since public law states that the parties have a right to resolution in court. The EU directive on unfair terms in consumer contracts is based on this legal principle and makes it more specific for consumer contracts.

d_theorist 10y ago
Ah, very nice. I like this explanation. Thanks. From a bit of random googling, it seems that this private/public law principle extends to common law countries, which would include the US. However, it appears that the US may have amended the public law to the effect that mandatory arbitration clauses are acceptable, whereas the EU has gone the other way and made their invalidity more explicit.
- user5994461 10y ago
  A contract cannot substitutes itself to the law, unless the law allows it. There are basically two sets of contracts laws in EU. One for company-to-company and one for company-to-consumers. The consumers laws are very protective for the consumers, because they are very vulnerable. For instance, for most contracts you're handed a standard paper and you can't set any term. Thus the law forbids many many terms, and an illegal term cannot be enforced (either the term is voided OR the full contract is voided), like the one that allegedly give up your right to sue in front of a judge. The company-to-company contracts have a lot more room for negotiations. It's assumed that companies are negotiating and equal footing and that they should do their due diligence, no excuse.

HenryBemis 10y ago

In a nutshell the EU policy is: 1. Constitution (where there is one) 2. Laws, Regulations (e.g. Central Banks) 3. Contract Simple scenario: So even if one signs a contract for "breaking a leg in the workplace and not reporting it", that clause is moot. It may even invalidate the contract in its entirety for being against Constitution/ Laws/ Regulations. So if you break a leg in the workplace, there is a law for that, which will auto-kick-in (pun intended) (investigations, responsibility/accountability assigned), thus the specific contractual clause will not "hide" the employers or the employee's negligence (depending on your imaginary scenario) or even the fact.