What is the arbitration clause in a contract?

An arbitration clause in a contract is an agreement between two parties that any dispute arising from the contract will be settled through a formalized, private process known as arbitration. This process is usually used in lieu of a trial in a court or other judicial process. In Texas, an arbitration clause is often used in contracts for landlord-tenant agreements, business contracts, car purchases, real estate purchases, and various other agreements. An arbitration clause is a legally binding contract between two parties and is enforceable in the same way a court decision can be enforced. The arbitration clause in a contract sets forth the details of how the dispute will be handled. This includes the process for selecting an arbitrator, the rules of evidence, and the manner of decision making. All parties to the contract must agree to the arbitration clause in writing. Arbitration is typically a faster process than litigation and can help reduce costs for the parties. An arbitrator appointed by the parties will make a final and binding decision in the dispute, and the parties are obligated to abide by the decision. The arbitrator can also issue financial awards to compensate one party for losses incurred as a result of the dispute. In Texas, the use of arbitration clause is governed by the Texas Arbitration Act. This act sets forth the requirements for the arbitration process, including the rules of evidence and the manner of decision making. The Texas Arbitration Act also provides each party with certain rights during the process, such as the right to present evidence and make arguments.

Related FAQs

What is the definition of “party autonomy” in arbitration?
Is there an appeals process for a motion to compel, stay or vacate an arbitration award?
Are there any special considerations for investment arbitration?
Are there limits to the amount of attorney’s fees that can be awarded by an arbitrator?
How do I select an arbitration forum?
What does the Federal Arbitration Act say about the enforcement of arbitration awards?
Can arbitration awards be appealed?
Can I challenge an arbitrator’s decision?
What is the difference between a motion to compel arbitration and a motion to stay proceedings pending arbitration?
How do I submit evidence in an arbitration hearing?

What is the arbitration clause in a contract?

Related FAQs

Related Blog Posts