Should arbitration be a part of your business contracts?

Should arbitration be a part of your business contracts?

On Behalf of | Dec 28, 2021 | Uncategorized

If you run a business, something you may be aware of is the risk of business disputes. Even if you take every possible action to avoid a dispute, there is a possibility that one will occur.

This is why many people opt to have an arbitration clause added to their contracts. An arbitration clause makes it possible to minimize the risk of litigation even if a dispute occurs, which may help you save both time and money in the event that you have a disagreement, breach of contract or other issue occur.

What are the benefits of an arbitration clause?

There are several benefits to having an arbitration clause in your contract, such as:

  • Avoiding hostility, since both parties will be expected to work toward a resolution outside of court
  • Maintaining privacy, since you won’t need to take a case to a public trial
  • Saving money, since you can go through arbitration more quickly and affordably than if you need to put together a case for court
  • Better flexibility

Arbitration is typically more efficient than trying to go to court for a dispute. Arbitrators themselves may have more expertise in the specific issues surrounding your case, too, which would make arbitration more likely to result in a solution that makes sense based on the specifics of the case.

Arbitration clauses help avoid litigation, which is beneficial in many cases. However, whether you want to have an arbitration clause or not should be determined by the likelihood of facing disputes and your preferences if a dispute does arise. Some business owners may prefer to leave open the option to pursue a lawsuit, depending on their circumstances.

Archives

Categories