Working in business, you know that there may be times when a contract dispute arises. There are different ways that you can handle disputes, but one of the ways that often works well for companies and individuals is arbitration.
Arbitration clauses are regularly added to contracts to prevent people from jumping to lawsuits. With arbitration, you’ll work through an alternative method of dispute resolution, negotiating a solution outside of court.
When can you use arbitration to resolve conflicts with contracts?
You can use arbitration, as long as all parties agreed to it, to handle issues such as:
- Not delivering products on time.
- Delivering the wrong items.
- Breaching the terms of the contract.
- Failing to make payments on time.
It’s most cost effective to use arbitration in most cases, and you may also be able to save the relationship between your business and the vendor, employee or other party.
How does arbitration work?
Arbitration is a type of alternative dispute resolution. It works similarly to a trial, but it is less formal.
How it works is that you and the other party will build your cases against each other outside of arbitration. You’ll work with your attorney to put together a case asking for the resolution you want. For example, if you are accusing the other party of breaching the contract and want to get some compensation for financial losses, you can draw up documents to support that request and present that information in the arbitration session.
Arbitration sessions are legally binding. So, when you present your case, you’ll want to make sure it’s as solid as it can be. An arbitrator, who may be a former judge, for example, will hear what you and any other parties have to say about the issue. Then, they will give their ruling.
Arbitration is beneficial because the costs are lower than going to trial (in most cases), and the arbitrator will come up with their decision swiftly at the end of the case. There is no jury, and you won’t have long delays. If you feel you have a strong case against the other party, this could be a good way to avoid more expensive, time-consuming litigation.