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What is an Arbitration Agreement?

Arbitration agreements are a popular way for businesses to limit their legal fees and keep disputes out of court.

You cannot opt ​​for arbitration unless you have an arbitration agreement signed by both parties. With an arbitration agreement, both parties will agree to arbitrate any future disputes, or current disputes, rather than going to court. Usually, arbitration agreements are signed at the beginning of a business relationship before any disagreements occur. There is hope that this will never need to be used, but if there is some sort of disagreement that will be the way to determine how it will be resolved. The parties also have the option of agreeing to mediation when a conflict occurs, and even after a lawsuit has been filed, if they wish to do so. This can happen only if both parties have agreed to this option at the time of the dispute, and there is no guarantee that this will happen. An arbitration agreement can be between two businesses, a business and an employee, a homeowner and a home builder, a business and an individual, a business and a labor union, and more. If two parties are doing business together, it is recommended that they both sign an arbitration agreement for their work together.

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