In Brower V

question 63

Multiple Choice

In Brower v. Gateway, the issue involved the enforcement of a mandatory and binding arbitration agreement pertaining to disputes between Gateway and its customers. With regard to the agreements enforcement, the court determined that:

• A) because the Standard Terms and Conditions Agreement made the arbitration agreement enforceable after the customer retained the computer for 30 days and over 30 days had elapsed, the agreement was considered accepted and enforceable.
• B) because Congress had indicated in the Federal Arbitration Act that arbitration agreements were the preferred method of dispute resolution, the courts were bound and preempted by Congress's stated policy, so the agreement had to be enforced.
• C) because the parties could not agree on a suitable arbitrator, the clause was useless and only litigation before a court could adequately and fairly resolve the dispute.
• D) because the mandatory fee required by the arbitration forum exceeded the cost of most of Gateway's products, the prohibitive cost of arbitration made the arbitration unfair and biased toward Gateway and therefore nullified the arbitration clause.

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Definitions:

Equilibrium

The state of the market when supply and demand are equal, ensuring stable prices.

Equilibrium Quantity

Equilibrium Quantity is the quantity of goods or services that is supplied and demanded at the equilibrium price, where the quantity supplied equals the quantity demanded in a market.

Increase in Supply

A situation in which the quantity of a good or service that producers are willing and able to offer for sale rises, holding all else equal.

Increase in Demand

Occurs when more of a good or service is sought by consumers at each and every price, often represented by a rightward shift of the demand curve.