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Office Location

  • North Palm Beach Office

    Address

    11911 U.S. Highway One
    Suite 303
    North Palm Beach, Florida 33408

Why does a prospective client or customer want me to sign a contract with a binding arbitration provision?

A binding arbitration provision is usually added to a contract by a business that knows it has substantially more resources than those with which it contracts.  Binding arbitration is a form of alternative dispute resolution, and it is not a lawsuit.  Binding arbitration does not take place before a judge, it is not in a courtroom, and there is no jury.  The intention of binding arbitration is to prevent parties from overcomplicating issues, to expedite the dispute resolution process (arbitration is typically much faster than a lawsuit), and to save long-term expenses of litigation. 

However, many businesses include binding arbitration provisions to deter, and sometimes prevent, clients and customers from obtaining any retribution for wrongdoings.  Binding arbitration can be expensive, and the up-front costs required of a claimant are exorbitantly greater than up-front court costs.  Binding arbitration usually puts a resource-heavy company at a massive advantage when there is a $10,000 dispute, but arbitration could cost a claimant several thousand dollars just to have an evidentiary hearing.

If a business urges you to agree to a binding arbitration provision, the safest way to determine your business’s needs is by contacting a Florida business attorney to protect yourself and your business.  Romaguera Law Group offers 100% FREE consultations and evaluations.

Romaguera Law Group represents many small- to medium-sized businesses in the State of Florida, and we follow the same general goals with each contract:

(1)Contract protects the client to the fullest extent plausible;

(2)Contract discourages the other party from suing the client;

(3)If the client has to file a lawsuit, the Contract language should make that lawsuit simple, quick, and efficient; and

(4)When the client wins the lawsuit, the other party must reimburse the client for its attorneys’ fees and court costs.