Arbitration agreements decide a legal dispute outside the courtroom.
An arbitration agreement is a contract between parties to arbitrate a legal dispute, as an alternative to a trial by jury. It is a written agreement usually prepared by lawyers, and once signed, it becomes legally binding. The Mediate website characterizes arbitration as convenient, flexible and efficient.
Alternative Dispute Resolution
A lawsuit commences by a person who has a legal grievance against another. As the lawsuit progresses, the parties may opt for alternative dispute resolution. Arbitration is a form of alternative dispute resolution, which means the parties agree to decide the matter outside the courtroom, sometimes at a bar association center or at a lawyer's office.
Contract
Contract principles govern the arbitration agreement. They contain any negotiated language. Attorneys draft, review and sign the agreement.
Terms
Arbitration agreements can dictate how the arbitration proceeds. For example, the parties may place a high cap on the amount of damages. Stated another way, the parties may agree the amount of damages cannot exceed a certain limit of recovery. Other language to the agreement may include limitations on how the evidence will be presented at the hearing.
Arbitrators
Generally, up to three arbitrators sit as a panel and hear the evidence. They collectively deliberate the award. In addition, the arbitration agreement typically spells out the means of compensation for the arbitrators' time.
Finality of Result
Arbitration agreements define the affect of the arbitration award. Typically, arbitration awards are final, unless otherwise stated in the agreement. According to the Alabar website, grounds for setting aside the arbitrators' decision are often not available.
