arbitration agreements benefit business owners

Arbitration Clauses – Why you want them!

Arbitration clauses in terms and conditions for web sites and apps provide the owner with huge benefits when disputes arise. An arbitration clause moves a dispute from the court system, and its unknown costs and duration, to a private arbitrator, wherein the cost and duration is generally known. Also, the arbitrator will be more familiar with your type of dispute than a court which deals with the gamut of commercial issues, so the decision will make more sense.

One of the main benefits is avoiding class actions. Class actions allow a number of plaintiffs who have low-value cases to band together with one attorney (who funds the class action) who recovers for the entire class. The problem is the attorney does not get paid until he or she recovers, so it can be a huge fight, even where the merits of the attorney’s case are weak. Each of the cases does not amount to enough money to bother bringing on its own, it’s only through joining the cases that the value is enough. Arbitration agreements explicitly prevent the joining of cases in this way.

Further, the evidentiary requirements are different from courts, and often paper-based, so you will not have to appear in another state or country to provide your side of the story, which can be a huge inconvenience to you. Instead, paper submissions cover the materials and the decision is made based on those. Further, you can choose an arbitrator that is convenient, so if you do have to show, it doesn’t sideline you for long.

In any successful business, disputes will arise, and the goal of arbitration is to resolve it fairly in a short and efficacious way. As a business owner, this can be your biggest benefit of having comprehensive terms and conditions for your app or web site.

1 Comment on “Arbitration Clauses – Why you want them!

  1. What you’re saying is completely true. I know that everybody must say the same thing, but I just think that you put it in a way that everyone can understand. I’m sure you’ll reach so many people with what you’ve got to say.

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