Drafting An Arbitration Agreement: What You Need To Know
Arbitration is becoming an increasingly popular method of dispute resolution, particularly in the business world. Arbitration provides parties with a method of resolving disputes outside of the court system, which can often be time-consuming and expensive. However, like any legal document, drafting an arbitration agreement requires careful attention to detail and a thorough understanding of the legal requirements. In this article, we will discuss what you need to know when drafting an arbitration agreement.
What Is An Arbitration Agreement?
An arbitration agreement is a contract between two or more parties that outlines the process for resolving any disputes that may arise between them. The agreement typically provides for the appointment of an arbitrator or a panel of arbitrators who will be responsible for hearing the case and rendering a decision. The purpose of the agreement is to provide a method of dispute resolution that is less adversarial and less expensive than going to court.
Key Provisions To Consider When Drafting An Arbitration Agreement
1. Applicable Law And Venue: It is important to specify the law that will govern the arbitration agreement and the venue where the arbitration will take place. This can be particularly important if the parties are located in different states or countries.
2. Scope Of The Arbitration Agreement: The agreement should clearly outline the types of disputes that will be subject to arbitration. This can include any disputes that arise out of or relate to the contract or any disputes that arise between the parties. The scope of the arbitration agreement should be carefully considered to ensure that it is comprehensive and inclusive.
3. Selection Of Arbitrator: The agreement should provide for the selection of an arbitrator or a panel of arbitrators. It is important to consider the qualifications of the arbitrator and to specify the process for selecting the arbitrator.
4. Discovery: The agreement should specify the scope and limitations of discovery. This can include limits on the types of documents that are discoverable and the scope of depositions.
5. Confidentiality: The agreement should provide for the confidentiality of the arbitration proceedings and the award. This can be important for businesses that want to maintain the privacy of their disputes.
6. Enforcement Of Award: The agreement should specify the process for enforcing the arbitration award. This can include the ability to seek judicial review of the award.
Drafting an arbitration agreement requires careful attention to detail and a thorough understanding of the legal requirements. The agreement should be comprehensive and inclusive to ensure that it is effective in resolving any disputes that may arise between the parties. By considering the key provisions outlined in this article, you can draft an effective and enforceable arbitration agreement that will protect your business interests.