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What are the benefits of an arbitration clause in your contract?

On Behalf of | Feb 9, 2023 | Arbitration and Mediation

No one wants to anticipate a dispute when starting a construction project. All being well, everything goes swimmingly and both parties reach the end happy with the work that’s been carried out.

Unfortunately, however, disputes are inevitable and unavoidable in some circumstances. To avoid the need for long drawn out court battles, many construction companies instead turn to arbitration before taking legal action.

What is arbitration and what are the benefits?

Arbitration is a form of alternative dispute resolution

When two parties to a construction contract are in dispute, arbitration is a process carried out by an independent third party.

The arbitrator acts as the judge in the matter and will make a decision as to what the parties’ rights and obligations are. At the conclusion of the arbitration process, the parties agree to (and are obliged to follow) the ruling of the arbitrator.

Why is it beneficial?

Firstly, it’s intended to be less formal and more cost-effective than taking a matter to court. The process is supposed to be one where each party is encouraged to come together and reach a resolution that works for everyone. There’s no need to adhere to the strict rules of evidence as there would be with a court hearing so it’s intended to be a much more inclusive and fulfilling process.

Additionally, it’s a much quicker process than waiting for a court date. Arbitration hearings can be scheduled at a time that suits all parties rather than being at the liberty of the court’s schedule. 

It can be difficult to know where to start with the arbitration process. Having the assistance of an experienced legal professional can help you to get started.