Sample Contractual Arbitration Clauses

Standard Business

ARBITRATION.  The Parties agree that any claim or dispute between them or against any agent, employee, successor, or assign of the other, whether related to this agreement or otherwise, and any claim or dispute related to this agreement or the relationship or duties contemplated under this contract, including the validity of this arbitration clause, shall be resolved by binding arbitration by the American Arbitration Association (or name other firm providing arbitration services, i.e., National Arbitration Forum), under the Arbitration Rules then in effect. Any award of the arbitrator(s) may be entered as a judgment in any court of competent jurisdiction. Information may be obtained and claims may be filed at any office of the American Arbitration Association or at Corporate Headquarters, 335 Madison Avenue, Floor 10, New York, New York 10017-4605. Telephone: 212-716-5800, Fax: 212-716-5905, Website: www.adr.org.   This agreement shall be interpreted under the Federal Arbitration Act.

Financial Services

ARBITRATION.  We agree that any claim, dispute or controversy between us or claim by either of us against the other or the employees, agents or assigns of the other and any claim arising from or relating to this agreement or the relationships which result from this agreement, no matter against whom made, including the applicability of this arbitration clause and the validity of the entire agreement, shall be resolved by neutral binding arbitration by the American Arbitration Association (or name other firm providing arbitration services, i.e., National Arbitration Forum), under the Arbitration Rules in effect at the time the claim is filed.  Any arbitration hearing at which you appear will take place at a location near your residence.  Rules and forms of the American Arbitration Association may be obtained and all claims shall be filed at any office of the American Arbitration Association or at Corporate Headquarters, 335 Madison Avenue, Floor 10, New York, New York 10017-4605. Telephone: 212-716-5800, Fax: 212-716-5905, Website: www.adr.org.

This arbitration agreement is made pursuant to a transaction involving interstate commerce, and shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16.  Judgment upon the award may be entered in any court having jurisdiction. [Optional: Nothing in this agreement shall be construed to prevent either party's use of bankruptcy or repossession, replevin, judicial foreclosure or any other prejudgment or provisional remedy relating to any collateral, security or property interests for contractual debts now or hereafter owed by either party to the other under this agreement.]

THE PARTIES UNDERSTAND THAT THEY WOULD HAVE HAD A RIGHT OR OPPORTUNITY TO LITIGATE THROUGH A COURT AND TO HAVE A JUDGE OR JURY DECIDE THEIR CASE, BUT THEY CHOOSE TO HAVE ANY DISPUTES DECIDED THROUGH ARBITRATION.

Employment

ARBITRATION. Employer and Employee agree that, for many reasons, lawsuits and court actions are disadvantageous to both. Therefore, they agree that any claim or dispute between them or against the other or any agent or employee of the other, whether related to the employment relationship or otherwise, including those created by practice, common law, court decision, or statute, now existing or created later, including any related to allegations of violations of state or federal statutes related to discrimination, and all disputes about the validity of this arbitration clause, shall be resolved by neutral binding arbitration by the American Arbitration Association (or name other firm providing arbitration services, i.e., National Arbitration Forum), under the rules of procedure in effect at the time any claim is made. (Each party shall pay its own costs of arbitration, except that Employer agrees to pay for ______ day(s) of arbitration hearings. Fees paid are subject to the award of fees, as provided by law and arbitration rules.)* This agreement is subject to the Federal Arbitration Act and any award of the arbitrator(s) may be entered as a judgment in any court of competent jurisdiction.  Information may be obtained and claims may be filed at any office of the American Arbitration Association or at Corporate Headquarters, 335 Madison Avenue, Floor 10, New York, New York 10017-4605. Telephone: 212-716-5800, Fax: 212-716-5905, Website: www.adr.org.  BY SIGNING THIS AGREEMENT, THE PARTIES ARE GIVING UP ANY RIGHT THEY MIGHT HAVE TO SUE EACH OTHER.

*The parenthetical language, invoking "cost sharing" is suggested by the "due process" guidelines promulgated by the ABA and CPR, reducing the cost of a hearing to the employee. At least one court has held that such "cost sharing" is legally required. These costs are substantially lower than the costs of any lawsuit.

Clauses Approved By The American Arbitration Association For General Commercial Use

Arbitration

The parties can provide for arbitration of future disputes by inserting the following clause into their contracts (the language in the brackets suggests possible alternatives or additions).

Future Disputes
Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial [or other] Arbitration Rules [including the Emergency Interim Relief Procedures], and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

Existing Disputes
We, the undersigned parties, hereby agree to submit to arbitration administered by the American Arbitration Association under its Commercial [or other] Arbitration Rules the following controversy: [describe briefly].  We further agree that a judgment of any court having jurisdiction may be entered upon the award.

Negotiation

The parties may wish to attempt to resolve their disputes through negotiation prior to arbitration.  A sample of a clause that provides for negotiation follows.

In the event of any dispute, claim, question, or disagreement arising from or relating to this agreement or the breach thereof, the parties hereto shall use their best efforts to settle the dispute, claim, question, or disagreement. To this effect, they shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable solution satisfactory to both parties. If they do not reach such solution within a period of 60 days, then, upon notice by either party to the other, all disputes, claims, questions, or differences shall be finally settled by arbitration administered by the American Arbitration Association in accordance with the provisions of its Commercial Arbitration Rules.

Daniel R. Denton, PC
Attorney & Mediator
P.O. Box 850
Beaufort, SC 29901
843.524.9445 
DanDenton@Lawyer.com

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