How To Draft A Successful Arbitration Clause Part 3
In the final installment of this three-part article we will wrap up our discussion on drafting a successful arbitration clause for your construction contract. As Sarasota construction lawyers, we know the importance of contractor’s understanding the benefits of arbitration clauses, and why they should not be overlooked. To view the rest of the article, please visit Part 1 and Part 2.
Pinpoint Any Conditions Precedent to Arbitration
In your contract, it requires that both parties must participate in a non-binding process, i.e., mediation, as a condition precedent to resorting to the arbitration process. Even though the arbitration process is less stressful than the litigation process, it can still be distracting and sometimes destructive for business relationships. Involving an experienced mediator early on can result in disputes being resolved more quickly, which is less expensive than going through the arbitration process.
Add a Mandate for Reasoned Opinions Alongside the Arbitrator’s Award
Unless the opposing party’s contract says otherwise, there is no requirement that states that an arbitrator must supply the parties with a specific form of the award. As a contractor, it might be important for you to understand why the arbitrator decided as they did. If you include that in your arbitration clause, the arbitrator will write a reasoned opinion explaining the award. You can also require the arbitrator to include their “findings of fact” and “conclusions of law” on some of the issues that came up during the case.
Require the Arbitrator to Enforce Contract Terms
In most cases, the arbitrator might grant any relief on something that they deem equitable within the agreed upon scope of work. However, sometimes parties will complain that the contractual and legal principles were lost during the arbitrator’s quest to do the right thing by both parties. If you have negotiated favorable contract terms that you don’t want lost in the jumble, think about drafting your arbitration clause to require the arbitrator to rigorously follow the agreed upon contract terms when making their final decision.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.