Arbitrations are confidential, which means that you will not have to publicly testify.Arbitration is usually faster and less expensive than litigating a case in court.Advantages of Signing an Arbitration Agreement The parties to a dispute may also agree to arbitration after a conflict has arisen, or even after a lawsuit has been filed. The agreement may also specify how the arbitrator will be chosen. It may specify certain arbitration rules, such as the American Arbitration Association (AAA) rules, and it may say whether there will be one arbitrator or a panel of arbitrators. The agreement may also say how the arbitration will be conducted. Sometimes a contract will say that only certain disputes will be arbitrated. They are often just a few sentences long, and are commonly found near the end of a larger contract under a heading such as “Arbitration” or “Dispute Resolution.” Employee arbitration agreements may be buried in an employment contract or employee handbook.Īn arbitration clause will typically say that all disputes arising under the larger contract will be submitted to binding arbitration. What’s In an Arbitration Agreement?īefore arbitration can go forward, the parties must have agreed to arbitrate the dispute.Īrbitration agreements are usually signed at the beginning of a business relationship – long before there’s a disagreement. Most arbitrations are binding, meaning that the parties must accept the arbitrator’s decision and cannot try to resolve the same dispute in court. Most arbitrations occur in a conference room rather than a courtroom, and the arbitrator may be a lawyer, a retired judge or a person with experience in a particular industry. In arbitration, the parties usually have a more limited right to obtain documents and other information from one another.

After the hearing, the arbitrator will make a decision.Īrbitration is more informal than litigation and the procedures are simplified. The arbitration process is similar to the proceedings in a court case: the parties may have lawyers, they exchange information, and there is a hearing where they question witnesses and present their cases. What Is Arbitration?Īrbitration is a way of resolving a dispute without filing a lawsuit and going to court. Understanding the pros and cons ahead of time will help you make a smart decision when you’re asked to sign. You may have agreed to arbitrate disputes when you clicked “agree” to a software license or when you purchased ordinary goods or services.īut what happens when an arbitration agreement is part of an important contract such as an employment agreement? Should you sign it?īy agreeing to arbitrate, you give up certain rights while also gaining some benefits. Arbitration agreements are everywhere these days, and chances are you’ve signed a few without even realizing it.

What is arbitration in law