Arbitration Agreement

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Upd. 1, Dec, 2022
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An arbitration agreement is a legally binding contract between two parties that offers an alternative dispute resolution to avoid civil court litigation. In case a dispute arises, and parties have a mutually agreed and signed contract, they enter into a process known as arbitration. An arbitration contract is the best option to solve conflicts arising in business processes or between the parties. Fill out this arbitration agreement form on Lawrina, download it from your inbox, and use it to resolve your dispute peacefully.

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Template Description

Unfortunately, disputes are something everyone faces at some point in life, either in the personal sphere or business sphere. They are especially stressful (and cost a fortune) when you need to go through civil court litigation. 

However, you can make dispute proceedings smoother with arbitration, which is a more flexible process in which ground rules are open to negotiation. To solve disputes with the arbitration, you must ensure both parties agree on the pre-signed arbitration agreement. 

What Is an Arbitration Agreement?

An arbitration agreement is a legally binding contract between two parties that offers an alternative dispute resolution to avoid civil court litigation. In case a dispute arises, and parties have a mutually agreed and signed contract, they enter into a process known as arbitration. Often an arbitration agreement is just a clause in a broader contract, such as a consumer agreement or employment agreement.

After the chosen arbitrator issues a written decision, often with an opinion attached, it cannot be appealed, unlike in litigation.

Advantages of Signing an Arbitration Agreement

There’re a few key reasons why you should consider signing a simple arbitration agreement form: 

  • Reducing the costs of dispute resolution (no more expensive fees for court hearings and hours of work of attorneys); 
  • Improving the speed of dispute resolution (with a signed arbitration agreement, you can resolve a dispute much quicker);
  • Protecting sales in a digital world (with a signed arbitration, your consumer rights are protected and you have no need to pay for expensive litigation in case of disputes);

Arbitration cases are more flexible in terms of witnesses’ testimonials. Any person with information of the relevant facts and pieces of evidence can be a witness as is mentioned in most state laws. 

  • Getting more flexible rulings than the civil court can issue (mainly because the process is far more casual, there are higher chances the parties can enjoy the final outcome);
  • Avoiding public records of proceedings (this is a common reason why people prefer arbitration to litigation. Mainly because there is no public record, confidentiality is much higher during arbitration);
  • Saving costs on litigation which is often more expensive (almost in all cases, litigation tends to drag on longer and cost far more).

When To Use an Arbitration Contract

The following are examples of when an arbitration contract is a necessity rather than a recommendation:

  • To protect consumer and dealer’s rights during purchases;
  • To clarify employment rights and obligations according to employment law.

Employers often add mandatory arbitration clauses in their employment contracts to be signed by employees (particularly companies that build a business with consumers).

Although the above are the most common cases when using a contract arbitration, this document can be proposed as an addition to any contract negotiation if both parties share the same desire — to head off the possibility of a future lawsuit.

Because arbitration agreements are often just clauses in broader contracts, it happens that people sign them without realizing they are doing so. That’s why you should always double-check every clause in a contract you sign. 

What Should Be Covered in the Contract?

Make sure to cover all the following points in your arbitration contract:

Parties’ contracts

The agreement should start with the full names and contact information of both parties who sign the agreement, including a registered address.

Elected arbitrators

There should be contact details of individuals who have been chosen to provide counsel and arbitration for this agreement. These arbitrators should be proven by both parties of the agreement and have no connection or biased attitude to any party. Parties specify how many arbitrators there should be. It is often better to have three arbitrators since each party gets a chance to nominate one for a more objective decision. 

Besides, the contract can specify specific criteria that an arbitrator must meet. Also, it can outline each party's input into the arbitrator selection process.

Pre-hearing conference

It’s an important clause that proves that both parties are aware of the pre-hearing conference in case the arbitrators will need clarification of any claims and details.

Final hearing

Details on when and where the final hearing will take place.

Costs and Fees

The clause states that both parties will split all arbitration-related fees and expenses equally unless agreed upon differently.

Applicable Law

The clause should state in accordance with which laws the arbitration will take place.

Award

This clause outlines any awards that should be granted to the aggrieved party, the date when it should be delivered, as well as an explanation of the award. 

Although the clauses mentioned above are the most common, arbitration agreements can actually cover much more issues that may arise after signing a contract. The more detailed your arbitration agreement is, the higher the chances that the parties will be able to minimize disagreements and be satisfied with the final outcomes of the arbitration. It is also common when instead of arbitration agreements, there is an arbitration clause added to a contract that covers just specific issues.

How To Write an Arbitration Template: Easy Steps

Follow the next steps to make an arbitration agreement:

Negotiate terms with another party

You should first mutually determine the ground rules of arbitration and agree to choose an impartial arbitrator together.

Fill out all the essential details

Once all the details have been negotiated, start by filling out the details in the Arbitration Agreement template PDF or arbitration letter template.

Print out your contract & sign

After you fill out the essential details in the blank printable arbitration template, go on with printing and signing the contract. You’re now all set with a throughout-created contract. 

Disclaimer

When you use this arbitration form PDF, you assume all responsibility and liability. Lawrina retains no legal responsibility for the legal document's accuracy, reliability, or functionality.

The unprofessional use of this legal form or other templates on this website could result in direct or indirect losses or damages. By downloading, printing, or using this agreement, you accept all liability for any loss or damage you may suffer.

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Frequently Asked Questions

What are the legal limits of forced arbitration?

The general legal limits of forced arbitration are still not defined and will depend to a degree on the state court system. Different federal courts of appeal have different positions on forced arbitration in general.

Who gets to decide whether the agreement to arbitrate is enforceable?

State contract law always governs whether the agreement to arbitrate is enforceable. Specific contract laws depending on a state may make an arbitration agreement sample template unenforceable depending on the details of that case/contract.

What is the standard for arbitrator bias?

The standard is that an arbitrator should be mutually selected by both parties and should not be interested in (or somehow related to) one of the parties. Otherwise, objectivity is questionable.