Arbitration is a very familiar practice in the construction industry. It’s an Alternative Dispute Resolution (ADR) method, giving disputing parties another option besides a court proceeding. Because arbitration is such a successful solution, more and more contractors are adding arbitration clauses to their contracts. These clauses state that all disputes between parties will be settled with arbitration instead of court (litigation). We see arbitration clauses being added more and more to contracts due to the fact that they allow parties to settle disputes more quickly, and avoid spending extra time and money in the courtroom.
As Orlando construction lawyers, we know that these clauses can help contractors save time and money in the event of a future dispute.
Are There Any Limits to Arbitration Clauses in the State of Florida?
There are a few requirements that differ by state, but the requirements are generally that:
- The arbitrator is a neutral and unbiased third party.
- The terms in the arbitration clause should be bilateral.
- The arbitration clause should state that both parties are bound by the rules.
- The arbitration clause should state that the plaintiffs should be able to discover evidence.
Can the Arbitration Clause be Enforced?
As Orlando construction attorneys, we know that the Federal Arbitration Act (FAA) states that arbitration clauses must be enforced in all cases where there is a maritime transaction, or where a contract involves a transaction crossing state lines. However, there are some cases where the Federal Arbitration Act does not apply, and if that happens then the State law will decide if the arbitration clause is enforceable.
Should I Hire An Attorney When Drafting an Arbitration Clause?
When it comes to drafting arbitration clauses, it can be a complex and confusing job. Orlando construction lawyers are well suited to assist you with drafting these clauses, and will help to ensure your arbitration clause is legitimate and binding.
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.