Arbitration Clause - Simple

Business and commercial contracts include mediation and arbitration clauses with increasing frequency. This is true with contracts between business to business, business to consumer, and public policy / government contracts such as:

  1. Contracts to Buy and Sell Real Estate in Colorado require mandatory mediation for disputes that arises related to the contract (paragraph 22)
  2. Concerning Common Interest Communities, SB 06-089 amended the Colorado Revised Statute 38-33.3-124 to read:
    Legislative declaration - alternative dispute resolution encouraged - policy statement required. (1) (a) The general assembly finds and declares that the cost, complexity, and delay inherent in court proceedings make litigation a particularly inefficient means of resolving neighborhood disputes. Therefore, common interest communities are encouraged to adopt protocols that make use of mediation or arbitration as alternatives to, or preconditions upon, the filing of a complaint between a unit owner and association in situations that do not involve an imminent threat to the peace, health, or safety of the community.
  3. Virtually all Credit Card Agreements
  4. Online Service Agreements for E-commerce
  5. Banking Agreements to open Checking or Savings Accounts
  6. Corporate Contracts
  7. Private Business Contracts

The interview with panel member Samuel Cheris (question #6) contains some things to think about when drafting arbitration clauses. 

A simple sample arbitration clause:

The Parties hereto agree that any and all claims, controversies or disputes arising from or related to this Agreement, including, but not limited to those claims, controversies or disputes pertaining to the formation, construction, performance, applicability, interpretation, enforceability, or breach of this Agreement, or any claim or assertion that all or part of this Agreement is void or voidable, shall be settled by binding arbitration according to the rules of Colorado Mediators & Arbitrators, LLC (hereinafter “CoMA”). Further, venue for the arbitration proceeding shall be in Denver, Colorado. The Parties hereto also agree that any award tendered by the arbitrator may be entered as a judgment in the Denver County District Court and enforceable as an order of said court and the Parties hereby submit to the venue and jurisdiction of that court for purposes of enforcement of any arbitration award.  The Federal Arbitration Act shall govern the interpretation, enforcement and proceedings pursuant to the arbitration clause in this agreement.

Disclaimer: The above sample clause is applicable to contracts interpreted pursuant to Colorado law. It is for informational purposes only and is not intended to constitute legal advice. Please consult with your legal advisor for specific language applicable to your contracts.