We find arbitration clauses in general consumer contracts and also in terms and conditions clauses for some apps and websites. The arbitration clause means that the two parties to an agreement go to arbitration rather than going to a legal court in the case of any disagreement. Both parties will have a meeting with a qualified arbitrator whose work is similar to a judge in the courtroom by deciding which party’s case deserves justice and should carry the day. The process is known to be either binding or non-binding. It depends on the agreement. In binding arbitration, whatever decision the arbitrator will make should be considered final. On the other hand, the non-binding arbitration lets you to take your dispute to a legal court if you are not fully satisfied with the decision of the arbitrator. This type of clause helps businesses when they include it in their contracts by keeping them from going into the usual time-consuming lawsuits if a dispute occurs between them and their customer or client. It is a great way of handling disputes between your customers and clients.
According to commercial litigation solicitors, litigation is one of the main advantages of this clause. It is considered as a much easier task to schedule a session with an arbitrator than with a legal court. The arbitration will let you choose an arbitrator with specialized knowledge of the concept or industry your case involves to. For example, the case is of a technical concept or some other specialized industry then the parties will be able to choose an arbitrator that qualifies for that concept or industry. This comes in handy when you don’t have to deal with the judge who is not qualified of that specialized knowledge or concept.
But it also has some of its disadvantages. Unlike in a typical court, you cannot ask for an appeal in arbitration. This finality will be a problem for some who want to have their options open. Arbitration is very costly than litigation. Because both the parties involved in a dispute pay the arbitrator individually it can easily coast both the parties thousands of dollars. Because both the parties will be paying for the convenience, flexibility in scheduling, and the right of choosing traits of your arbitrator. If you don’t have a problem with this agreement and you completely agree with this agreement then you lose your right to sue the company. You will be forced to take all the legal recourse issues and your freedom of choice will be lost. It will take away the right of wronged consumers to band together so that they cannot form a convenient class-action lawsuit. This will put much greater pressure on the consumer.
After listing all the pros and cons of arbitration, it should be clear that the businesses include the arbitration clause (binding-arbitration) in their terms and conditions or agreements in case of a dispute. If you are going to add this clause in your legal agreements then you should mention it early on in your agreement. There should also be a way to opt-out if someone does not agree with it by providing a link or something.
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