An arbitration clause is a clause in a contract assigning dispute resolution under that contract to arbitration. An arbitration agreement, on the other hand, is typically a separate agreement between the parties, either entered into by the contracting parties as a separate understanding to the contract but at the time of signing the contract or entered into subsequent to the contract when a dispute arises under the contract. However, the general rule is that an arbitration clause or agreement is separate from the contract itself.

When drafting an arbitration clause or agreement, there are several key things to consider.

First, you should decide whether you want the arbitration to be binding or non-binding. A binding arbitration means that the parties are required to abide by the arbitrator’s decision, while a non-binding arbitration means that the parties are not required to follow the arbitrator’s decision and can still go to court if they choose to do so.

Next, you should decide whether you want the arbitration to be conducted by a single arbitrator or by a panel of arbitrators. A single arbitrator may be less expensive and faster, but a panel of arbitrators may provide a more balanced and fair decision.

You should also consider the rules and procedures that will govern the arbitration. There are several different sets of rules that can be used for arbitration, such as the rules of the American Arbitration Association or the International Chamber of Commerce.

Finally, you should consider where the arbitration will take place and what law will govern the arbitration (the venue and seat of arbitration, respectively). This will typically be determined by the parties to the contract, and can be important for determining the legal rights and obligations of the parties.

Overall, an arbitration clause should be carefully drafted to ensure that it meets the specific needs and objectives of the parties to the contract.

It is important to consult our arbitration experts if you have any questions or concerns about drafting an arbitration clause.