Q: I have a contract with a vendor that contains an arbitration clause. What is it and is it enforceable? She claims now that I cannot sue her.
An arbitration clause commits you to submitting to binding arbitration if a dispute arises. This prevents you from ever being able to take the company or business to court.
When to Look. Before you sign the contract! Once you have signed a contract, the arbitration clause is in full effect.Courts do uphold arbitration clauses.
Where to Look. The arbitration clause is typically located within the last five paragraphs of the contract or may be contained on a separate page. When you turn to the signature line, scan the last few paragraphs and look for a heading elated to “Disputes”, “Dispute Resolution”, or “Arbitration”.
What It Should Contain. An arbitration clause should tell you what rules you must arbitrate under, where the arbitration is to be conducted, who the arbitration service provider is, and how you may contact that arbitration service provider for more information or to file a dispute. The service provider will set the fees.
It is likely that you will be subject to the arbitration clause and will likely need to pursue that avenue. Consult an attorney for your options before seeking arbitration.
Editor's note: The information in this column is not intended as legal advice but to provide a general understanding of the law. Readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances.
