Arbitration Agreement Template

An arbitration agreement is a written contract between two people or businesses. It says that if a legal problem comes up, they will handle it through arbitration instead of filing a lawsuit in court.

Arbitration takes place outside of the courtroom, where a private, neutral person (called an arbitrator) listens to both sides and then makes a decision. This decision is usually final and binding.

Many employers include an arbitration agreement sample when someone starts a new job. Companies often prefer arbitration because it saves time, avoids court fees, and keeps matters private.

Signing a sample arbitration agreement can have some benefits, especially if you want a faster and less stressful way to work out a disagreement. Here are a few reasons why some people choose to sign one:

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

Usually, no. If you sign an arbitration agreement form, you are agreeing not to sue in court. Instead, you must solve any legal disagreements through arbitration.

There are a few rare exceptions where a court might allow a lawsuit, such as:

But in most cases, once you sign, you give up your right to take the matter to court — even if you later change your mind. Always keep a copy of the arbitration agreement PDF to have legal evidence in case something goes wrong.

In most states, an employer has the legal right to ask you to sign an arbitration agreement. That means they can say, "You must sign this if you want to work here." Ask the employer to provide a sample arbitration agreement PDF so that you can study the document thoroughly and discuss the points that worry you.

However, in some states, like Califormia, laws protect employees who choose not to sign. An employer may not be allowed to fire or refuse to hire you just because you disagree with arbitration.

The Federal Arbitration Act (9 U.S.C. § 1-16 “FAA”) governs arbitration agreements in contracts involving interstate commerce and applies in both federal and state courts. FAA requires that arbitration agreements be in writing to be enforceable.The form can vary; it can be an arbitration clause in a commercial contract, a stand-alone arbitration agreement, or other type of written agreement. 

Chapter 1 (9 U.S.C. § 1-16) stipulates general provisions applicable to arbitration agreements involving maritime, interstate, and foreign commerce.

The 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") is implemented in Chapter 2 (9 U.S.C. 201-208), which governs any contractual or non-contractual relationship between parties that is deemed to be commercial in nature, unless both parties are citizens of the United States and the relationship involves property located abroad or has some other reasonable connection to one or more foreign states.

Chapter 3 (9 U.S.C. §§ 301-307) implements the 1975 Inter-American Convention on International Arbitration (“Panama Convention”). Where both the New York and Panama Convention could apply to the enforcement of an arbitral award, the NY Convention applies, unless the parties indicate the Panama Convention should apply. 

The US has not enacted the United Nations Commission on International Trade Law (“UNCITRAL”) Model Law, however several states have enacted statutes based on Model Law, namely: California, Connecticut, Florida, Georgia, Illinois, Louisiana, Oregon, and Texas.