When is Arbitration Required for a Business Dispute?

The default in any business litigation case is that it will end up in court if one party decides to sue. However, many contractual agreements will have a clause to specify a choice of forum. The parties to a contract may agree that any dispute could be brought in only a certain court (usually located where the more powerful party is). Some contracts may keep the case out of court altogether and force it into arbitration.

Normally, businesses that draft contracts want their case in front of an arbitrator. This forum is less expensive for them, and it has a reputation of being more business-friendly. Arbitrators are formally trained, and they will consider facts and evidence as a judge would. Customers will often try to challenge the arbitration agreement because they want their day in court. If your agreement requires arbitration, courts will not often overturn that clause.

Arbitration Is Part of a Contract

If there is no arbitration clause in the contract, one party cannot force another into arbitration. The clause would only be included if it was agreed upon at the time of signing the contract. Other than that, there is no requirement whatsoever for arbitration. Once parties are dug into their positions, one may not want to go to arbitration. Usually, this is a decision that one will need to make before they even begin the business relationship. If you are a business, you should consider putting arbitration clauses in your contract to protect yourself from expensive and time-consuming litigation.

Call a Dunwoody Business Litigation Attorney

Battleson Law LLC advises businesses on contracts and resolving disputes. We can help your company handle agreements and lawsuits. Call us today at 470.398.0720 or contact us online to learn about our services.


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