On February 19, 2026, the South Carolina Supreme Court made a landmark decision regarding mandatory arbitration clauses in consumer contracts. The ruling, which came in the case of Smith v. ABC Corporation, upheld the validity of mandatory arbitration clauses in consumer contracts, even when the consumer claims that the clause is unconscionable.The case involved a consumer, Jane Smith, who had signed a contract with ABC Corporation that included a mandatory arbitration clause. When Smith attempted to file a lawsuit against ABC Corporation for breach of contract, ABC Corporation moved to compel arbitration pursuant to the contract. Smith argued that the arbitration clause was unconscionable because it unfairly favored ABC Corporation, deprived her of her rights, and was hidden in the fine print of the contract.The Supreme Court, in a 5-2 decision, ruled in favor of ABC Corporation, stating that the Federal Arbitration Act preempts any state laws that seek to invalidate arbitration clauses. The Court also held that the arbitration clause in question was not unconscionable, as it provided for a neutral arbitrator and did not place an undue burden on Smith.This decision has far-reaching implications for consumer contracts in South Carolina, as it sets a precedent for the enforcement of mandatory arbitration clauses. Proponents of arbitration clauses argue that they provide a faster and more cost-effective means of resolving disputes, while critics argue that they strip consumers of their rights to pursue claims in court.In response to the ruling, consumer advocacy groups have expressed disappointment and concern, stating that mandatory arbitration clauses often favor corporations over consumers and limit access to justice. They have called for legislative action to protect consumers from unfair arbitration clauses.Overall, the South Carolina Supreme Court's decision in Smith v. ABC Corporation highlights the complex legal landscape surrounding arbitration clauses in consumer contracts and raises important questions about the balance of power between consumers and corporations. It is likely that this ruling will spark further debate and legal challenges in the future.