Arbitration provisions in business agreements can be helpful, but need to be thought through with care.
Traditionally, legal disputes between two parties have been resolved by a judge or jury in a court proceeding. Increasingly, however, parties in business transactions are opting to have disputes resolved by binding arbitration. The assumed advantage of binding arbitration is that it can provide a quicker and less expensive resolution of a legal dispute. Nevertheless, there are circumstances in which a traditional court proceeding may be advantageous.
Before entering into a significant business agreement, you should have legal advice about whether a court proceeding or arbitration is the better mechanism to protect your interests in the event a dispute arises about the agreement.