An arbitration clause requires disputes to be resolved through private arbitration rather than in court. Dealers favor arbitration because it is typically faster, less expensive, and less public than litigation — and because arbitrators may be perceived as more favorable to repeat business clients like dealers than to individual consumers. However, the Federal Arbitration Act and Florida law both recognize limits on the enforceability of arbitration clauses.

Unconscionability is the most common ground for challenging an arbitration clause. A clause may be procedurally unconscionable if it was buried in fine print, presented on a take-it-or-leave-it basis, or if the consumer had no meaningful opportunity to review or negotiate it. A clause may be substantively unconscionable if it is so one-sided that it effectively denies the consumer any meaningful remedy — for example, by prohibiting class actions, limiting discovery, or requiring arbitration in a distant location.

Fraud in the inducement is another ground for challenging arbitration. If the dealer's fraud induced you to sign the contract in the first place, you may argue that the arbitration clause — as part of that fraudulent contract — should not be enforced. Courts are divided on this issue, and the analysis depends on whether the fraud claim goes to the contract as a whole or specifically to the arbitration clause.

Some consumer protection statutes limit the enforceability of arbitration clauses. The Magnuson-Moss Warranty Act, for example, has been interpreted by some courts to prohibit pre-dispute arbitration clauses in written warranties. If your claim is based on a warranty, this may be an important argument.

Even if arbitration is required, it does not mean you cannot recover. Arbitration can be an effective forum for consumer claims, particularly when the arbitration rules provide for fee-shifting and the consumer's claims are strong. An experienced consumer law attorney can evaluate whether to challenge the arbitration clause or to proceed in arbitration, and can represent you effectively in either forum.