What is Arbitration Agreement Drafting?
An arbitration agreement is a legal contract that states parties involved in a dispute agree to settle it via arbitration instead of going to court. While it can be a complete contract, it can sometimes appear as a clause in a larger contract.
If you need to draft an arbitration agreement, you’ll want to provide details about the arbitration process and decision to ensure clarity for both parties.
Read the rest of this article for information about things to include in your arbitration agreement, how to draft it, and when to seek legal guidance from a qualified lawyer to protect both parties’ interests.
What Core Components Should be in an Arbitration Agreement?
An arbitration agreement usually contains the following key terms:
- Dispute scope. Explain which disagreement or claim is covered by the agreement to prevent confusion.
- Governing law. Specify the law that governs the agreement and arbitration process.
- Costs. Explain how admin and other costs will be split between the parties.
- Confidentiality. This clause is important to state if the proceedings will be kept private.
- Enforceability. Clarify if the final decision is legally binding.
- Arbitrator. Mention information about the arbitrators for the process, such as how many will be hired and how they will be appointed.
How Should You Draft an Arbitration Agreement?
When drafting an arbitration agreement, here are some things you should consider so that you write clear and legally valid clauses.
Include a Scope Clause
While you want to be clear about the types of disputes covered by the agreement, you should use broad language to include disputes that could be related to the agreement. This prevents future challenges.
Outline Arbitration Rules
Your agreement should state what rules the arbitration will follow, such as those of an arbitration institute, so that you have clarity and consistency. Address how the hearings will be conducted and how evidence will be exchanged and presented so that both parties know what to expect. Being transparent is linked to providing a fair process and resolution.
Consider How Arbitrators are Appointed
You want to clarify how the arbitrator(s) will be selected and what happens if parties can’t seem to reach an agreement on who is appointed. For example, if parties can’t agree on an arbitrator to appoint within a certain timeframe, one could be selected by a competent authority.
Include Costs
Provide an outline of all costs and fees included, and how they will be shared between parties. Both parties need to understand their financial obligations prior to the arbitration process, preventing further disputes.
State if the Decision is Binding
You could mention in the agreement that the arbitrator’s decision, or award, is final and legally binding on both parties, and can also be enforced by a court. This is important because it provides finality to resolve the dispute while keeping parties obligated to comply with what was decided by the arbitrator.
How Does a Lawyer Help You Draft an Arbitration Agreement?
Hiring a lawyer is advisable when drafting an arbitration agreement as they will be able to conduct various activities to protect your interests.
A lawyer will help you by:
- Defining the arbitration scope. They’ll clearly identify what disputes must be submitted to arbitration.
- Explaining rules for arbitration. They’ll guide you through the relevant rules so you know what to expect.
- Determining the seat of arbitration. They’ll identify the legal seat that determines the arbitration’s procedural legal framework.
- Establishing how arbitrators are selected. They’ll explain and guide you through the entire selection process.
- Outlining all involved costs. They’ll clarify all financial obligations that apply, such as arbitrator fees and legal costs, to prevent hidden expenses.
- Providing confidentiality clauses. They’ll include clauses to protect the private matter from being exposed to third parties.
- Clarifying the award. A lawyer will establish if the award is legally binding and can be enforced by a court.
- Reviewing an arbitration agreement. They’ll conduct a thorough review of an agreement you’ve already drafted, checking that all its terms are legally valid and clear.
Where to Find a Lawyer for Arbitration Agreement Drafting
If you’ve ever had to search for a lawyer, you might not have known where to find one. It takes time to conduct your own research during a lawyer search. But, using an online legal platform makes it easier to connect with a lawyer to draft your legal contracts.
ContractsCounsel is one of the largest online legal marketplaces where clients have access to a curated network of lawyers who have been vetted on the platform. The platform provides transparent lawyer data so that it’s even easier to find and hire a lawyer.
If you want to ask a lawyer on ContractsCounsel to draft your arbitration agreement, here are the easy steps to follow.
- On your device, go to the ContractsCounsel marketplace.
- Select ‘One-time project’ and ‘Create or update contract.’ Alternatively, select ‘Contract review’ if you want a lawyer to review your agreement.
- Post your project, which is free. You can include information about your agreement, such as the nature of your dispute, to match with appropriate lawyers.
- Wait for bids. Lawyers on the platform will send you multiple bids to work on your project.
- Review the lawyer data. The platform provides extensive lawyer information such as their credentials, location, years of experience, field of expertise, and client ratings for other projects they’ve completed on the platform.
- Select a lawyer who appears to fit your requirements and hire them to draft your arbitration agreement for a flat fee.
