Voluntary Arbitration Clause for the United States

Voluntary Arbitration Clause Template for United States

A Voluntary Arbitration Clause is a contractual provision under U.S. law that establishes an agreement between parties to resolve disputes through arbitration rather than court litigation. The clause is governed by the Federal Arbitration Act and applicable state laws, providing a framework for alternative dispute resolution that can be more efficient and cost-effective than traditional litigation. It includes specific provisions for arbitrator selection, cost allocation, and procedural requirements.

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What is a Voluntary Arbitration Clause?

The Voluntary Arbitration Clause serves as a fundamental component in modern U.S. commercial and employment relationships, providing a structured approach to dispute resolution outside traditional court systems. This document type is particularly relevant when parties wish to establish a clear framework for handling potential disputes efficiently and cost-effectively. The clause must comply with the Federal Arbitration Act and relevant state laws, while addressing key elements such as scope of arbitrable matters, selection of arbitrators, and procedural requirements. Voluntary Arbitration Clauses are commonly used in employment contracts, consumer agreements, and business-to-business relationships, offering flexibility while maintaining legal enforceability.

What sections should be included in a Voluntary Arbitration Clause?

1. Parties: Identification of the parties entering into the arbitration agreement

2. Background: Context and circumstances leading to the arbitration agreement

3. Definitions: Key terms used throughout the arbitration agreement

4. Agreement to Arbitrate: Clear and unambiguous statement of parties' agreement to submit disputes to arbitration

5. Scope of Arbitration: Definition of which disputes are covered by the arbitration agreement

6. Arbitration Procedures: Process for initiating arbitration and selecting arbitrators

7. Governing Law: Specification of applicable law governing the arbitration agreement

8. Severability: Provision ensuring that if any part of the agreement is found invalid, the rest remains enforceable

What sections are optional to include in a Voluntary Arbitration Clause?

1. Class Action Waiver: Waiver of right to participate in class actions, recommended for consumer and employment contexts

2. Cost Allocation: Specification of how arbitration costs will be shared, particularly important in employment contexts

3. Opt-out Provisions: Terms allowing parties to opt out of arbitration within specified timeframe, recommended for consumer agreements

4. Confidentiality: Provisions regarding the confidentiality of the arbitration proceedings and outcome

5. Emergency Relief: Provisions for seeking emergency court relief while preserving arbitration rights

What schedules should be included in a Voluntary Arbitration Clause?

1. Schedule A - Arbitration Rules: Detailed procedures and rules governing the arbitration process

2. Schedule B - Fee Schedule: Breakdown of arbitration costs and fee structure

3. Schedule C - Arbitrator Selection Process: Detailed procedures for selecting and appointing arbitrators

4. Schedule D - Notice Forms: Template forms for initiating arbitration and providing required notices

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Cost

Free to use
Industries

Federal Arbitration Act (FAA): Primary federal law governing arbitration that establishes the validity and enforceability of arbitration agreements, sets basic requirements for arbitration clauses, and preempts conflicting state laws

State Arbitration Laws: Individual state arbitration statutes that must comply with both state and federal requirements; some states have additional specific requirements for arbitration agreements

Supreme Court Precedents: Key cases including AT&T Mobility LLC v. Concepcion and Epic Systems Corp. v. Lewis that establish fundamental arbitration principles in U.S. law

Industry-Specific Regulations: Specific regulations for different sectors including employment agreements (EEOC considerations), consumer contracts, and financial services regulations

Clear Agreement Requirement: Legal requirement that the arbitration agreement must be clear and unambiguous in its terms and intent

Mutuality of Obligation: Legal principle requiring that the arbitration agreement must be mutually binding on all parties involved

Fundamental Fairness: Legal requirement that the arbitration process must be fundamentally fair to all parties and provide adequate means of dispute resolution

Scope Definition: Clear definition of which issues and disputes are subject to arbitration under the agreement

Arbitrator Selection Process: Specific procedures for how arbitrators will be selected and appointed for dispute resolution

Cost Allocation: Clear specifications on how arbitration costs will be distributed among the parties

Venue Specifications: Clear designation of the location or venue where arbitration proceedings will take place

Court Proceedings Waiver: Explicit waiver of the right to pursue disputes through court proceedings

Severability Provisions: Clauses ensuring that if one part of the arbitration agreement is found invalid, other parts remain enforceable

Opt-out Provisions: Where applicable, clear procedures for how parties can opt out of the arbitration agreement

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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