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Does Your Contract Require Arbitration

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Liza C. Moore
Foster Swift Agricultural Law News
April 30, 2015

Imagine with me: You signed a contract, and now you are not satisfied with the other person’s performance. You want to file a lawsuit. But does your contract allow you to sue? Many contracts require all disputes to be resolved through arbitration as opposed to a lawsuit in court. If the contract you are trying to enforce has an arbitration clause, you might be restricted to pursuing your claim in arbitration, not the courts.

Many good reasons exist for arbitration as opposed to litigation. For example, arbitration can be confidential and more efficient. The use of specialized, industry-specific arbitration systems, such as the National Grain and Feed Association Arbitration System, results in a case being decided by someone with knowledge of the industry. But sometimes people are surprised when they learn they have to arbitrate. The bottom line is that you need to review contracts carefully—before you sign them—in part so that you know what your options will be if you ever need to take action to enforce the agreement. Be sure you and your attorney review contracts up front to prevent surprises later.