Does your contract have an arbitration clause?

Contracts of any kind are often long, specific and full of legalese. Because of this, many people may not always grasp every element of the agreement. This is not uncommon, but if you sign something without understanding it and without getting an explanation from your attorney, you could wind up agreeing to some unfavorable terms.

For instance, if you own a business, you may very well be party to several different contracts with employees, partners, suppliers, contractors, property owners and other businesses. Do you know if any of these contracts contain an arbitration clause?

An arbitration clause is a contractual term that specifies arbitration as the chosen means of resolving disputes. In other words, any disputes that arise between two parties will be addressed in arbitration, not litigation. This can be good or bad, depending on your position.

Many business owners in Orlando strongly prefer arbitration to litigation. It is typically less expensive, faster and more private than a lawsuit, all of which can be crucial priorities for a business.

However, consumers, employees and other business owners may not feel so positive about being limited in their dispute resolution options. This can be especially true if they did not know they agreed to arbitration in a contract.

With all this in mind, we encourage readers of this blog to think about the contracts they have signed or are asking others to sign. Is there an arbitration clause in there? Is it in your best interests to agree to this type of clause, or would it behoove you to negotiate that element of a contract?

Before you make any decisions or agree to anything in a commercial contract, it is critical that you review the document with an attorney. If you already signed a contract with an arbitration clause, you still have legal options. In some cases, the contract could be invalidated. If that cannot happen, you can still work with your attorney to make your case and fight for a satisfactory resolution through arbitration.