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Arbitration Agreement Template: Disputes, Rules, Venue & Costs
ARBITRATION AGREEMENT FAQ
What is an Arbitration Agreement?
An Arbitration Agreement is a legally binding contract where two or more parties agree to settle disputes through arbitration rather than court litigation. Arbitration is typically faster, private, and less formal than going to trial.
Why is an Arbitration Agreement important?
It helps reduce legal costs, speeds up dispute resolution, and keeps matters confidential. For employers and businesses, it provides more predictability in handling disputes. For employees and contractors, it may offer a quicker resolution than lengthy court processes.
When should you use an Arbitration Agreement?
Use it when hiring employees, entering into contractor agreements, or forming business partnerships where both parties want to avoid court litigation. It can be a stand-alone agreement or a clause within a larger contract.
What should an Arbitration Agreement include?
It should specify the scope of disputes covered, the arbitration rules or governing body (e.g., AAA, JAMS), procedures for selecting arbitrators, location of proceedings, allocation of costs, confidentiality, and whether the decision is binding.
Is arbitration always binding?
Yes, most arbitration agreements specify that the arbitrator’s decision is binding on all parties. However, some may allow non-binding arbitration where the parties can still pursue litigation if unsatisfied.
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