A business contract, lease or other written contract may contain an arbitration clause. By using such a clause, the parties to the contract agree to arbitrate any future disputes. As with any clause, all parties must agree to it’s use in the contract before the contract is signed. The following arbitration clause language may be modified to suit the needs of the parties or used “as is” in order to utilize the services of Washington Arbitration & Mediation Service or its national organization, United States Arbitration & Mediation, if arbitration is ever needed.

SAMPLE ARBITRATION CLAUSE:
In the event a dispute shall arise between the parties to this [contract, lease, etc.], it is hereby agreed that the dispute shall be referred to [one of the following choices: (1)designate Washington Arbitration & Mediation Service or alternate service by agreement of the parties; (2) provide a method of selecting the arbitrator and situs of the hearing, such as “from the county wherein the manufacturing plant is located”; or for multi-jurisdicational disputes (3) insert “a USA&M office to be designated by USA&M National Headquarters”] for arbitration in accordance with the Washington Arbitration & Mediation Service (or United States Arbitration and Mediation, Inc. national) Rules of Arbitration. The arbitrator’s decision shall be final and legally binding and judgment may be entered thereon.

Each party shall be responsible for its share of the arbitration fees in accordance with the applicable Rules of Arbitration. In the event a party fails to proceed with arbitration, unsuccessfully challenges the arbitrator’s award, or fails to comply with the arbitrator’s award, the other party is entitled to costs of suit, including a reasonable attorney’s fee for having to compel arbitration or defend or enforce the award.

It is also recommended that contracts containing arbitration clauses, particularly those involving employment relationships, contain the following language, in boldface print above the signature lines:

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH AFFECTS YOUR LEGAL RIGHTS AND MAY BE ENFORCED BY THE PARTIES.