Clause Guide
Arbitration Clause clause: meaning, risks, and what to negotiate
Requires disputes to be resolved through arbitration instead of court.
What it means
Arbitration clauses remove the ability to go to court and instead require private dispute resolution.
Common risks
3 risks identifiedArbitration may limit appeal rights.
Costs may be higher than expected.
The arbitrator selection process may favor one side.
What to check before signing
ChecklistWho selects the arbitrator?
Which arbitration rules apply?
Where will arbitration occur?
Negotiation ideas
ActionableSpecify a reputable arbitration institution.
Require neutral arbitrator selection.
Split arbitration costs evenly.
Example clause
All disputes arising from this Agreement shall be resolved through binding arbitration under the rules of the American Arbitration Association.
Frequently asked questions
1 questionsCan arbitration decisions be appealed?
Usually only in very limited circumstances.
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