Between _____________

And _____________

This ARBITRATION AGREEMENT (the "Agreement") is effective as of _________________ by and between _____________, located at _____________, _____________, _____________ _____________, and _____________, located at _____________, _____________, _____________ _____________ (each a "Party" and collectively the "Parties").

WHEREAS, the Parties are signing this Agreement in contemplation of future disputes that may arise between them and in recognition that litigation is often costly and time-consuming;

NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties do hereby agree as follows:

1. Voluntary Negotiation. The Parties may voluntarily agree to first attempt to resolve the dispute through informal negotiation. Either Party may decide to forego or stop negotiation at any time.
2. Voluntary Mediation. In recognition that mediation may offer a faster and less expensive resolution than arbitration, if the Parties are unable or unwilling to resolve the dispute through informal negotiation, then the Parties may choose to submit the dispute to mediation, to be administered according to the terms herein. Either Party may decide to forego or stop mediation at any time.
3. Voluntary Arbitration. In the event that the Parties are unable or unwilling to resolve the dispute through informal negotiation and/or mediation, then the Parties may choose to submit the dispute to binding arbitration, administered in accordance with the terms stated herein. Any judgment and award issued by the arbitrator(s) will be final and binding on the Parties and may be entered in any court of proper jurisdiction.
1. Governing Rules. Unless the Parties agree otherwise, arbitration and/or mediation under this Agreement will be administered by the American Arbitration Association (AAA) in accordance with its most current (the "Rules") as of the effective date of this Agreement, to the extent such Rules are not contrary to the express provisions of this Agreement. The Rules can be found at the AAA's website at https://www.adr.org. Each Party acknowledges that it is its own responsibility to read and be familiar with the Rules prior to signing the Agreement.
1. Ad Hoc Arbitration. In the event that the Parties choose to forego administration of the dispute by the AAA and the arbitration process comes to a deadlock or otherwise fails to reach a final resolution, then the Parties agree to submit the dispute to the AAA.
2. Location. If the Parties are unable to agree upon the location of any arbitration or mediation conducted pursuant to this Agreement, then the location will be determined by the AAA.
3. Arbitrators. The dispute will be resolved by one arbitrator unless otherwise agreed by the Parties or otherwise determined in accordance with the Rules.
4. State or Federal Court; Recovery. If any claim or cause of action at law or in equity is filed by either Party in any state or federal court which results in arbitration being compelled and/or the claim or cause of action being dismissed, stayed, and/or removed to arbitration pursuant to this Agreement, the Party who instituted the claim or cause of action in state or federal court, either wholly or in substantial part, will, at the discretion of the arbitrator(s), reimburse the respondent for its reasonable attorney's fees, costs, and necessary disbursements to the extent permitted by law, in addition to any other relief to which it may be entitled related to the state or federal court claim or action.
5. Arbitration Recovery. In the event that an arbitrator holds that a Party has generally prevailed in the arbitration proceeding, then the arbitrator will award to that party, without limitation, its reasonable out-of-pocket expenses related to the arbitration, including filing fees, arbitrator compensation, attorney's fees, and legal costs. If an arbitration or any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing Party, either wholly or in substantial part, will, at the discretion of the arbitrator, be entitled to its reasonable attorney's fees, costs, and necessary disbursements to the extent permitted by law, in addition to any other relief to which it may be entitled.
6. Confidentiality. Each Party, including its representatives, agrees not to disclose the existence, content, or results of any mediation or arbitration conducted under this Agreement without the prior written consent of the other Party, unless such disclosure is required by law.
7. Governing Law. The Parties agree and acknowledge that any dispute under this Agreement, as well as all provisions of this Agreement, will be construed, interpreted, and enforced in accordance with the laws of the State of _____________ exclusively and without reference to principles of conflict of laws. The Federal Arbitration Act (the "FAA") will supersede state laws to the extent inconsistent. Any claim involving the construction or application of this Agreement must be submitted to arbitration within the statute of limitations period for such claim under _____________ law and will be dismissed if the statute of limitations period is not met. The arbitrator(s) will have no authority to apply the law of any other jurisdiction.
8. Scope of Disputes. The dispute resolution process agreed to herein applies whether or not such disputes arise under federal, state, or local law and whether or not such disputes are based upon statutory, common law, or contract grounds.
9. General Terms
1. Severability. If any provision of this Agreement or the application thereof is held to be invalid or unenforceable for any reason and to any extent, that provision will be considered removed from this Agreement; however, the remaining provisions will continue to be valid and enforceable according to the intentions of the Parties and to the maximum extent permitted by law. If it is held that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
2. Modification. The Parties hereby agree that this document contains the entire agreement between the Parties and this Agreement may not be modified, changed, altered, or amended in any way except through a written amendment signed by all of the Parties hereto.
3. Descriptive Headings. The descriptive headings used herein are for convenience of reference only and they are not intended to have any effect whatsoever in determining the rights or obligations of the Parties.
4. Construction. The pronouns used herein include, where appropriate, either gender or both, singular and plural.
5. Counterparts; Electronic Signature. This Agreement may be executed in counterparts, including by fax, email, or other facsimile, each an original but all considered part of one Agreement. Electronic signatures placed upon counterparts of this Agreement by a Party or their approved agent will be considered valid representations of that Party's signature.
6. Authority to Sign. Each Party or authorized agent signing below represents that it has proper power, authority, and capacity to execute and deliver this Agreement and so bind the Parties.

I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL.

_____________

Sign: ___________________________     Date: ______________________

Print: ___________________________

Title: ___________________________

_____________

Sign: ___________________________     Date: ______________________

Print: ___________________________

Title: ___________________________

Whether the parties are already in dispute or they simply want to lay the ground rules in advance, LegalNature's agreement will provide them with a dispute resolution process that minimizes time and expense while ensuring each party's interests remain well protected. The following information provides additional details on some of the key aspects of your agreement.

The American Arbitration Association

The American Arbitration Association, or AAA, is a not-for-profit administrative organization that has a long history of providing mediation and arbitration services throughout the United States.

Your agreement is set up to allow the parties to use the AAA's services, and we recommend that you take advantage of the AAA's experience and expertise to help resolve your disputes. Their fees for mediation and arbitration services are available on their website, with mediation normally being the least expensive alternative.

That said, both parties can always agree to use another administrative organization (such as USA&M) or an independent mediator or arbitrator. However, doing so may leave the parties without a predictable process for resolving their dispute.

Parties Involved

The first question will help determine the appropriate dispute resolution rules to apply in your agreement. One size does not fit all when it comes to dispute resolution. For instance, the resolution process for disputes among construction industry professionals is different than for disputes between a labor union and a business.

Each option has its own set of rules provided by the AAA, which are available for review at any time on its website. Selecting "Other" will allow the mediator or arbitrator to determine the most applicable set of AAA rules unless both parties agree to another set of rules.

Existing Disputes

Select "Yes" if the parties are signing this agreement in order to set up a resolution process for an existing dispute. When prompted, provide details on the nature of the dispute. This should be a general statement that both parties agree to.

Dispute Process

This agreement sets up a typical alternative dispute resolution process for parties seeking to resolve disputes outside of court. The dispute process has three stages: 1) voluntary negotiation, 2) voluntary mediation, and 3) mandatory or voluntary arbitration (depending on your answer).

In this context, "voluntary" means that both parties have to agree to it for it to occur. Therefore, the first two stages can be entirely skipped if either party chooses to opt out. However, each stage gets more time-consuming and expensive than the previous one, so it is usually in the parties' best interests to proceed in order.

Voluntary negotiation is simply informal negotiation between the parties. The parties usually decide on a time, location, and discussion points beforehand, and then the relevant personnel meet along with any attorneys or representatives in order to try to reach a resolution.

Voluntary mediation is more structured, and the AAA has specific procedures for conducting it. A neutral mediator is selected to help the parties reach a resolution but does not have the power to issue a binding judgment or award on the dispute.

If you choose to make arbitration voluntary, then both parties must agree in order to start the proceedings. However, once the parties agree to submit to arbitration, or if you choose to make arbitration mandatory, then the ruling of the arbitrator will be final and binding. If a party refuses to cooperate with a ruling, then the other party can enforce the judgment in a court of law (and also recover any legal fees and costs for having to do so).

Emergency Measures

In some situations, a party may need a fast or immediate ruling in order to stop the other party from infringing on its rights or protect its property. In this case, that party can either apply to a court for an injunction or preliminary relief, or, if arbitration is mandatory, it can apply to have an emergency arbitrator appointed by the AAA who will follow the AAA emergency rules to provide relief for the party.

Type of Disputes

Most commonly, parties sign this agreement in relation to a contract between them. However, these agreements are sometimes used to cover disputes that relate to the parties' relationship. For instance, parties may wish to use this agreement for their ongoing business or other relationship, such as employer and employee, service provider and service receiver, labor union and business, etc.

You may also want to use this agreement in relation to an activity or event or even multiple activities or events. This can include any potential scenario where disputes may occur, but it most typically involves events where at least one of the parties is acting in an individual capacity rather than as a business.

Executing the Agreement

To execute the agreement, simply have each party sign in the signature section where indicated. Make sure each party gets a copy of the signed agreement for safekeeping.

Next Steps

Next, the parties should proceed through the dispute resolution process outlined above. With arbitration, note that the AAA can provide expedited proceedings (called "desk arbitration") under certain circumstances. Assuming all goes well, the parties should eventually reach a fair settlement that allows them to move past their differences and continue business as usual.