Submission Clause In Arbitration Agreement Template for the United States

What is a Submission Clause In Arbitration Agreement?

A Submission Clause in Arbitration Agreement is essential when parties wish to establish a clear framework for dispute resolution outside traditional court systems. This document, governed by U.S. federal and state arbitration laws, specifies how and when disputes will be submitted to arbitration, the scope of arbitrable matters, and the procedural framework for the arbitration process. It's particularly crucial in commercial contracts where parties seek efficient, private, and potentially less costly dispute resolution mechanisms. The clause typically includes details about the arbitration process, selection of arbitrators, applicable rules, and the binding nature of the arbitration decision.

About the Submission Clause In Arbitration Agreement

When you're entering into a commercial agreement or contract, including a well-drafted submission clause in your arbitration agreement is crucial for establishing how disputes will be resolved outside the traditional court system. This legal provision creates a binding framework that directs parties to arbitration when conflicts arise, potentially saving time, money, and maintaining business relationships through private dispute resolution.

When do you need this document?

You need a submission clause in arbitration agreement when entering into commercial contracts, employment agreements, consumer transactions, or international business deals where you want to avoid costly litigation. This clause is particularly valuable in construction contracts where technical disputes are common, technology licensing agreements involving intellectual property, and franchise agreements where ongoing business relationships must be preserved. Many businesses include these clauses in vendor agreements, partnership contracts, and service agreements to ensure predictable dispute resolution processes.

Key legal considerations

Your submission clause must clearly define the scope of arbitrable disputes to avoid challenges about what matters can be arbitrated versus litigated in court. The clause should specify which arbitration rules apply, such as American Arbitration Association or JAMS procedures, and detail the arbitrator selection process including qualifications and number of arbitrators. You must consider unconscionability issues, ensuring the clause doesn't unfairly favor one party through prohibitive costs or unreasonable procedures. The clause should address discovery limitations, confidentiality requirements, and whether arbitration decisions are final or subject to limited appeal rights. Class action waivers within arbitration clauses require careful drafting following Supreme Court precedents like AT&T Mobility v. Concepcion.

Legal requirements in United States

Under the Federal Arbitration Act, your arbitration agreement must involve interstate commerce to qualify for federal enforcement, though most commercial agreements meet this threshold. The clause must be in writing and clearly express mutual agreement to arbitrate covered disputes. State arbitration laws may impose additional requirements, such as specific disclosure provisions for consumer contracts or heightened unconscionability standards in employment agreements. Some states have unique requirements for arbitration clauses in certain industries like healthcare or financial services. The clause must comply with due process requirements, ensuring both parties have meaningful opportunity to present their cases. International agreements should consider the New York Convention requirements for enforcement of arbitral awards across borders, including proper notice provisions and compliance with public policy limitations.