Many people first learn about arbitration when a company tells them a dispute must go to an arbitrator. That raises a fair question: can you really be forced? In most cases, if you signed a valid agreement to arbitrate, the answer is yes. There are limits, though.
The general rule
Under the Federal Arbitration Act, courts generally enforce valid written arbitration agreements. If your contract contains an arbitration clause and the dispute falls within it, a court can order the parties to arbitrate and pause a lawsuit.
When arbitration may not be required
- No agreement: You cannot be required to arbitrate if you never agreed to it.
- Dispute outside the clause: The clause may cover only certain types of claims.
- Contract defects: Fraud, duress or unfair terms can affect whether an agreement is enforceable.
- Certain claims by law: Some kinds of claims are protected from mandatory arbitration by statute. This varies, so confirm with an attorney.
Reading the clause
Check what it covers, who administers the case, and whether the decision is binding. A clearly written clause is more likely to be enforced. See the examples in our sample arbitration clauses.
If the other side will not arbitrate
The opposite problem also happens. When a party refuses to take part, read what happens when one party refuses to participate in arbitration.
Is arbitration fair?
Arbitration is a neutral process with a written decision, and it is often faster than court. online arbitration is handled entirely online. This article is general information and not legal advice, so speak with a licensed attorney about your specific agreement.
