How To Draft A Successful Arbitration Clause Part 1
As Brandon construction lawyers, we are familiar with the common claims and disputes that occur frequently in the construction industry. While it’s best to avoid construction claims and disputes from the beginning of the project, if they do happen to arise it’s important to resolve them quickly and efficiently. Efficient resolutions of claims and disputes are vital to the economic success of the project. However, if disputes do come up, arbitration is the easier route to go with versus litigation. To view the rest of this article, please visit Part 2 and Part 3.
One of the main advantages of arbitration versus litigation is that the two disputing parties usually have more of a chance to tailor the dispute resolution process to their specific needs. That is why, whether you’re a contractor, subcontractor, or supplier, we’ve compiled a checklist of considerations to observe when working with a Brandon construction attorney. This will create an effective arbitration clause in a construction contract with a lower-tier contractor, subcontractor, or supplier.
Pre-select the Hearing Location in Your Arbitration Provision
To make the arbitration proceeding a little less expensive, pre-select a location for a possible hearing that will be convenient to access for you and any likely witnesses you might need to testify in the case. If a contractor requires in their contract that any hearings will be conducted in a familiar location, they can also decrease the risk of having an arbitrator choose from their opposing party’s home territory. However, once an arbitrator is selected, parties always have the option to mutually agree to have the arbitration hearing conducted in a different location.
Include an Election to Arbitrate Clause
In most jurisdictions, it is legal to design an arbitration clause to allow one party to require arbitration as their only option, instead of litigation or another dispute resolution procedure.
Limit Any Pre-Hearing Discovery
In most cases, arbitration proceedings are conducted under the rules of an arbitral institution, i.e., the American Arbitration Association. However, even if the arbitration clause takes on those standard rules, the parties have the option to limit the rules. For example, the clause might say that there will be no pre-hearing discovery, or it must be limited.