What is a post-dispute arbitration agreement?

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A post-dispute arbitration agreement means that an issue has arisen that could lead to litigation, but the parties instead decide to make an agreement to submit the case to binding arbitration. A post dispute arbitration agreement is different from a pre-dispute arbitration agreement or arbitration clause found in a contract, because a pre-dispute agreement is used before and in case an issue arises. A post-dispute arbitration agreement is used afterward. This means when the parties sign one, they know for sure they are actually going to end up in arbitration.

Understanding a Post-Dispute Arbitration Agreement

Parties who are involved in some kind of legal dispute may choose to sign a post-dispute arbitration agreement for several reasons. For one, as a form of alternative dispute resolution, arbitration may be less contentious than courtroom litigation. The arbitration process often resolves disputes faster than litigation. Arbitration may also be less expensive than a full, protracted, drawn out court battle. Furthermore, and perhaps most importantly to some, when a dispute is arbitrated, private matters remain private instead of becoming court record.

A post-dispute arbitration agreement can also be made in many different types of situations. A divorcing couple may decide to sign a post-dispute arbitration agreement if they can't work out a property settlement or custody division in their divorce. A company who is having a dispute with a customer or client may decide arbitration will be a more equitable way of resolving their issue and still be able to maintain a business relationship. Whatever the reason, once the parties agree and arbitrate an issue, the arbitrator's decision is binding on them. 

Getting Help

Before signing a post-dispute arbitration agreement, be sure to get proper legal advice from an attorney who can advise you on whether or not signing is the best course of action.

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