When two parties to a contract, marriage, business venture or other have a dispute, there are a number of ways to settle those disputes. The parties can file suit and go to court, mediate, perform informal negotiations, or they can arbitrate.
What is arbitration?
Arbitration is an alternative dispute resolution option in which parties agree to submit their dispute to a neutral arbitrator (or arbitrators) who will issue a binding decision.
Arbitration can be an attractive option for dispute resolution for the following reasons:
- Can be less costly than formal litigation (not always!)
- Often keeps emotions at bay between the parties
- The parties have the option to choose an arbitrator
- Arbitration record is confidential (whereas courtroom record is public record)
- Arbitration can be pre-determined by contract
- Arbitration often resolves the dispute much faster than courtroom litigation
In Virginia and North Carolina, arbitration clauses are generally enforceable if they are part of a valid agreement. If all the requirements of a valid contract are met, arbitration clauses will be upheld – this provides another benefit in that it can prevent a rogue counter-party from pushing to formal litigation without first attempting the agreed upon arbitration.
Unfortunately, arbitration does not always go as smoothly as parties intend. If necessary, a court may vacate an arbitrator’s award. A party who desires to have an award vacated must prove corruption, fraud, undue means, or that the arbitrator was partial or exceeded his/her power.
You may want to consider adding an arbitration provision for your business. However, arbitration provisions should not be used in every contract, so we recommend seeking legal advice to determine whether an arbitration provision is right for your unique situation. Give our office a call today to talk through those options! Our team is standing by to help with all legal needs for your business. Would arbitration best suit the legal needs of your business? Does your business need an arbitration clause in its important contracts? Please reach out to us! Our team provides turn-key solutions to your business through an efficient streamlined process. We have assisted hundreds of businesses determine the best contract provisions, including whether to utilize arbitration. Give us a call today!