{"id":2279,"date":"2022-02-13T21:26:01","date_gmt":"2022-02-13T21:26:01","guid":{"rendered":"https:\/\/uk.legalvision.com.au\/?p=2279"},"modified":"2024-05-07T01:18:12","modified_gmt":"2024-05-07T00:18:12","slug":"arbitration-clause","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-contracts\/arbitration-clause\/","title":{"rendered":"Pros and Cons of Including an Arbitration Clause in Your Contract in the UK"},"content":{"rendered":"\n

If you are entering into a contract with another business, you may want to consider what would happen if you entered into a dispute<\/a>. Planning ahead for the worst eventualities can help you if something goes wrong. One way of doing this is to include an arbitration clause in your contract. This article will explore the advantages and disadvantages of using an arbitration clause so you can make the right choice for your business. <\/span><\/p>\n\n\n\n

What is Arbitration?<\/span><\/h2>\n\n\n\n

Put simply, arbitration is one form of alternative dispute resolution<\/a>. <\/span><\/p>\n\n\n\n

In a dispute, you and the other party disagree about something in the contract. Additionally, a dispute occurs if you or the other party are in breach of your obligations under the contract. If this happens, you can try to solve your dispute in many ways, such as negotiation, mediation, arbitration or litigation. <\/span><\/p>\n\n\n\n

Arbitration<\/a>, in particular, is where the disputing parties resolve their problem through arbitration proceedings. This occurs in front of an arbitration hearing. During a hearing, you must argue your case in front of an arbitrator, who then makes a decision (usually called an arbitration award). The decision is likely to give one of the parties compensation. <\/span><\/p>\n\n\n\n

\n

In many ways, arbitration is similar to litigation. Litigation is where you take your case to court through formal court proceedings, and you argue your case before a judge. <\/span><\/p>\n<\/div>\n\n\n\n

There are, however, some key differences between arbitration and litigation which make arbitration more appealing in some situations.<\/span><\/p>\n\n\n\n

What is an Arbitration Clause?<\/span><\/h2>\n\n\n\n

If you decide that arbitration is a type of dispute resolution which you would like to use in the future if necessary, then it is a good idea to include an arbitration clause in your contracts. <\/span><\/p>\n\n\n\n

An arbitration clause is a clause in a contract that requires both parties to solve their dispute through arbitration rather than any other way. Usually, this means that the other party cannot forcefully bring litigation against you. Instead, they will have to use the arbitration process. This can be preferable for you, as you can avoid dealing with a party who insists on using litigation, even when it is less cost-effective and less time efficient for you. <\/span><\/p>\n\n\n\n

Another party might insist on litigation if they think that they can drag out legal proceedings to the point where your business cannot afford to continue. Having an arbitration clause will help you avoid such a situation. <\/span><\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

\n
\n Need legal advice?\n
\n \n Call 0808 196 8584<\/a> for urgent assistance.\n
\n Otherwise, complete this form, and we will contact you within one business day.\n <\/span>\n <\/div>\n\n \n\n
\n