Tuesday, February 4, 2014


You are the chief executive of a manufacturing firm, and have gotten embroiled in a dispute with one of your suppliers or customers.

Other executives in your firm encourage you to "go to the mat" on this one, meaning that you should spend what ever monies are necessary to win, since they think your case is so strong, and "it's the right thing to do."

Yet you know that a court case will be very costly, lengthy and will have no sense of finality and closure, since either side can appeal the decision of the court.

Your corporate attorney advises you that arbitration may be a viable option to litigation, but there is not an arbitration clause in your existing contract with your opponent.

No problem.  You should be able to convince the other party that it is in both your interests to arbitrate rather than litigate. Since the benefits are so strong, it might not take much convincing unless they are emotionally attached to their position.  The process then involves incorporating an addendum to your contract and adding one of the standard arbitration clauses, such as this one from the AAA:

"We, the undersigned parties, hereby agree to submit to arbitration
administered by the American Arbitration Association under its
Commercial [or other] Arbitration Rules the following controversy:
[describe briefly]. We further agree that a judgment of any court having
jurisdiction may be entered upon the award."

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