Free Arbitration Agreement Template

An arbitration agreement is a written contract in which two parties agree that if a dispute comes up, they'll resolve it through arbitration instead of filing a lawsuit in court. Arbitration takes place outside the courtroom: a private, neutral arbitrator hears both sides and issues a decision, called an award, which is usually final and enforceable in court.

Employers commonly use an arbitration agreement template when onboarding new hires, since it lets them resolve wage, benefits, or termination disputes without a jury trial. Businesses also use them in vendor and customer contracts to keep disagreements private and move them along faster than litigation would.

An arbitration agreement can stand on its own, or it can appear as a clause inside a larger contract, like an employment contract or service agreement. Either way, its core function is the same: both parties give up their right to sue in exchange for a faster, more private process.

Use an arbitration agreement form in situations where both sides want a private, faster alternative to court, such as:

When not to use one:

The goal is to agree on what to do if things don't go as planned — which helps both sides feel more secure.

Every arbitration agreement contains standard sections, but a small set of clauses attracts most of the negotiation, litigation, or state-by-state variation. Sample language for each is included below; customize the bracketed values before signing.

What it does: Sets out how the parties will choose a neutral arbitrator, including any qualifications the arbitrator must have. Courts look closely at this clause when deciding whether an agreement is fair enough to enforce.

Sample language:

The parties shall select a single arbitrator by mutual agreement within [15] days of a dispute arising. If the parties cannot agree, the arbitrator shall be appointed under the rules of the [American Arbitration Association]. The arbitrator must have at least [5] years of experience in [relevant field].

When to include/omit: Include in nearly every arbitration agreement. An unclear or one-sided selection process is one of the most common reasons courts refuse to enforce arbitration clauses.

State variation: California courts, following Armendariz v. Foundation Health Psychcare Services (2000), require that the arbitrator be genuinely neutral and that selection procedures not favor the employer; agreements that let only the employer pick the arbitrator are routinely struck down as unconscionable.

What it does: Requires each party to bring disputes individually rather than as part of a class, collective, or representative action.

Sample language:

The parties agree that any arbitration will be conducted only on an individual basis and not as a class, collective, or representative action. The arbitrator has no authority to consolidate claims or preside over any form of class or representative proceeding.

When to include/omit: Include when the business wants to limit exposure to group claims; omit or narrow it in contracts covering sexual harassment or sexual assault disputes, where such waivers are unenforceable under federal law.

State variation: In California, a class-action waiver can still push an employee's individual wage claims under the Private Attorneys General Act (PAGA) into arbitration, but under Adolph v. Uber Technologies (2023), the employee keeps standing to pursue the representative PAGA claim in court, so a waiver drafted for other states may not fully apply there.

What it does: Specifies who pays the arbitrator's fees, filing fees, and administrative costs of the arbitration.

Sample language:

[Company Name] shall pay all costs unique to arbitration, including arbitrator fees and administrative fees. Each party shall bear its own attorney's fees unless the arbitrator's award provides otherwise.

When to include/omit: Include in every employment arbitration agreement. Leaving cost allocation vague or shifting standard arbitration costs onto the employee is a common ground for unenforceability.

State variation: California, under Armendariz, requires employers to cover any arbitration costs an employee wouldn't have faced in court; agreements that make employees share arbitrator fees in employment disputes are frequently invalidated there.

What it does: Keeps the existence, content, and outcome of the arbitration private, unless disclosure is required by law.

Sample language:

Except as required by law, the parties, witnesses, and arbitrator shall not disclose the existence, content, or results of the arbitration without the prior written consent of both parties.

When to include/omit: Include when privacy is a priority, such as in employment or business disputes involving sensitive information; consider omitting or narrowing it in consumer agreements, where broad confidentiality clauses sometimes draw added scrutiny for limiting transparency.

State variation: No major state bans confidentiality clauses outright, but courts in several states will refuse to enforce one if it's used to conceal a pattern of unlawful conduct, such as repeated harassment claims against the same employer.

Yes. Arbitration doesn't require legal representation, and many individuals represent themselves, especially in smaller consumer or employment disputes. That said, because an arbitrator's decision is usually final and very hard to appeal, it's worth at least consulting an attorney before the hearing if the claim involves significant money or complex legal issues.

The two main types are pre-dispute arbitration agreements, signed before any disagreement arises (common in employment and consumer contracts), and submission agreements, signed after a dispute has already started to send that specific disagreement to arbitration. Agreements can also be binding, where the arbitrator's decision is final, or non-binding, where either party can still take the matter to court afterward.

Signing one can mean a faster, more private, and often less expensive path to resolving a dispute than going through court. It also sets clear rules in advance (who the arbitrator will be, how costs are split, and where the hearing takes place), so there's less confusion if a disagreement actually happens.

Generally, no. Signing a valid arbitration agreement means you're giving up your right to sue in court over the disputes it covers. There are limited exceptions: if the agreement itself is unclear, if someone signed under pressure or without understanding it, or if the claim involves sexual harassment or sexual assault, which federal law exempts from forced arbitration.

In most states, including California, after the Federal Arbitration Act was found to preempt the state's ban on mandatory employment arbitration in Chamber of Commerce v. Bonta, an employer can require arbitration as a condition of employment and can decline to hire, or can terminate, someone who refuses to sign. The one federal exception is claims of sexual harassment or sexual assault: under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, an employee can't be compelled into arbitration for those specific claims, and refusing arbitration on that basis alone can't be held against them.

Yes, when properly drafted and signed. The Federal Arbitration Act makes arbitration agreements "valid, irrevocable, and enforceable" in both state and federal court, as long as the agreement is in writing and doesn't strip away rights a court would otherwise protect.

No federal law requires notarization for an arbitration agreement to be enforceable. Some parties choose to have signatures witnessed or notarized anyway, since it can help defend the agreement later against a claim that a signature wasn't genuine or voluntary.