In the event a dispute shall arise between the parties to this [contract, lease, etc.], it is hereby agreed that the dispute shall be referred to USAM Minneapolis, Minnesota St. Paul, MN for arbitration in accordance with the applicable United States Arbitration and Mediation Rules of Arbitration. The arbitrator's decision shall be final and legally binding and judgment may be entered thereon.
https://www.dwolla.com/dialogs/terms_and_conditions.aspxThat's for a dispute between you and Dwolla, not for a dispute between you and another Dwolla customer. If you have a dispute with another Dwolla customer, that would be governed by your agreement with that customer or the laws in the various jurisdictions if you don't have one.
What I worry about is the potential he-said, she-said situation. For instance, say I accept Dwolla and after receiving payment send the bitcoins to the address I was given. Then afterward, the person claims I was supposed to send to a different address, and that I must have made the mistake of sending to the wrong address.
That's between you and the other customer. That's not Dwolla's problem. They told Dwolla to send the money, Dwolla sent the money. You received the money. There is no dispute between you and Dwolla.
However, it now seems that Dwolla is charging back the merchant. This does create a dispute, and it's entirely between the merchant and Dwolla. I can't imagine what Dwolla could say in arbitration. Default of a third party is not a defense to failing to comply with the terms of an agreement. (If you have a contract to provide me with shrimp and you can't supply me with shrimp because your fisherman defaults on you, you owe me damages. The default of the third party explains, but doesn't excuse, your non-compliance. You are still liable for it.)
Dwolla's claim would be default of a third party. That would entitle them to any money back that could be recovered, but not at the expense of the merchant. (For example, if the merchant could minimize their damages to less than the amount that was charged back, the difference would be due back to Dwolla.)
If default of a third party were a defense to non-performance, anyone could get away with not performing what a contract requires simply by laundering the contract through a third party. Say I want to have a sure market for my shrimp. So I enter into an agreement to sell you a certain amount of shrimp at a certain price. I get a sure market, you get a sure seller, so it's good for both of us. But if I can't provide you the shrimp, I'm liable.
No problem, I just get an intermediary to make the contract with you. If I don't provide the shrimp now, the intermediary simply says "sorry, my shrimp supplier fell through, not my fault". Obviously that can't be right. You cannot excuse your own failure to perform by pointing to a third party's failure to perform for you. (You can
explain your failure, but you cannot excuse it. Obviously, you cannot be required to provide shrimp you don't have. But you are liable for the damages you cause by your non-performance.)
The situation is special for credit cards because of consumer protection laws, but so far as I know, no special laws excuse Dwolla's non-performance. An arbitrator can change things like the rules of evidence, but an arbitrator must follow the law especially where, as here, the parties have not agreed to some other set of rules to govern their transactions.
