Drafting Your Arbitration Clause: A Checklist (Risk Management: Special Section on Alternative Dispute Resolution‪)‬

The only way to keep your disputes out of the court system is to set up something with the parties you do business with. The most reliable method is to place ADR language in all your business contracts and agreements. There are no rules about what language can and cannot be used other than it must be fair to both parties. Similarly, there is no perfect ADR clause. Simplicity is nice, but clarity is better. For example, if an arbitration clause simply says the parties agree to submit any disputes to final and binding arbitration, too many issues are left open. Which arbitration organization (i.e. tribunal, such as AAA)? How are arbitrators selected? How many arbitrators? What system of laws does the arbitrator use? Where will it be located? How are expenses shared?