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What is an arbitration clause? Why should I have one in my Contract?

Saturday, March, 19, 2011


What is an arbitration clause?
Very simply it is a section you add to your contract that says if you have a disagreement, you and the other party(ies) agree not to sue one another. You will have your dispute settled by an unbiased arbitrator or an arbitration attorney instead. This keeps your dispute out of the over-clogged courts and saves you both time and money.

Why should I have an arbitration clause in my Contract?
By adding this very simple clause to your contract you make it clear that there will be no court, federal or state, involved should there be a dispute. This really is a benefit to both parties, not just the party who drew up the contract.

Court cases can drag on for years. Especially contract disputes. There are hairs to split and minute interpretations to consider. And did you know that even minor decisions within the progression of the case could be appealed as well as the final outcome of the case itself? This appeal process can cost far more than either party ever meant to spend on a court case and take up even more time than either party ever expected.

But when you have an arbitration clause in place you can bypass all of this and go straight to an unbiased third party – your arbitration attorney and get down to negotiating a resolution immediately. This benefits everyone involved.

It's faster, it's cheaper, it's just as fair as court and it's less stressful for everyone.