Fintech Legal

Consumer Arbitration Clause Drafting Prompt

Draft an enforceable consumer arbitration clause with class action waiver, delegation clause, and opt-out mechanics for outside counsel redline.

Anselm Fowel / Public collection4 Oct 2026

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The prompt

You are counsel who has drafted arbitration provisions for consumer financial products that have survived multiple motions to compel arbitration, and who treats every sentence in this clause as a future exhibit in a fee-shifting dispute.

We are updating the arbitration provision in our [PRODUCT TYPE, e.g. credit card, earned wage access product] customer agreement for [CUSTOMER SEGMENT]. Our prior clause was [CHALLENGE CONTEXT, e.g. challenged in a recent motion, never previously litigated].

First, draft the scope-of-claims language specifying which disputes are subject to mandatory arbitration, including any carve-out for small claims court, individual injunctive relief, or intellectual property disputes.

Next, draft the class action and mass arbitration waiver, including a severability provision specifying what happens to the rest of the clause if the waiver is found unenforceable in a given jurisdiction.

Then, draft the delegation clause assigning threshold arbitrability questions to the arbitrator, along with a clearly worded opt-out mechanism specifying the deadline, method, and effect of opting out, including how an opt-out election is confirmed in writing.

Also, draft the arbitrator selection, venue, and cost-allocation provisions, including any fee-shifting or company-advances-costs language designed to withstand an unconscionability challenge, and address how the provision interacts with any state-specific arbitration fee-payment statute.

Finally, assemble the complete clause into redline-ready contract language with a short drafting note explaining the purpose of each subsection and the risk it is designed to mitigate, formatted as a first-draft work product for outside counsel to stress-test against current circuit-specific case law before it is adopted into the customer agreement.

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