Arbitration Agreements

Locating Your Contract

The contract or terms of a service agreement may have be mailed or it may be available to be viewed or printed from a website.  The consumer should also be aware that the original contract terms can be amended over time and that contract updates may be sent with period bills or statements, or in a separate mailing.  To obtain an updated copy of any agreement, a consumer should contact customer service for the business in question.

Finding the Arbitration Agreement

Arbitration agreement language is often contained in its own section within the contract or agreement.  This section may be labeled "Arbitration," "Dispute Resolution," "Binding Arbitration," "Agreement to Arbitrate Disputes," or something similar. 

Sample Arbitration Agreement

The following is one example of what an arbitration agreement in a consumer contract may look like, along with brief explanations of several terms/phrases contained within.  The exact terms of individual arbitration agreements may vary, so please be sure to specifically locate the arbitration agreement in your contract.

Arbitration Agreement Terms

The arbitration agreement could range from one or two to several paragraphs long. It typically states that disputes which arise between the consumer and the business will be resolved in arbitration rather than in court. Other terms may include:

• Definition of the types of claims that may be resolved in arbitration and the types of claims that may be resolved (if any) in court.
• Naming the body of law that governs the arbitration agreement (very often the Federal Arbitration Act).
• The names and contact information for the arbitration organization(s)/administrators.
• Instructions on how to access the arbitration rules and procedures.
• Instructions on how to find the necessary information to file an arbitration claim.
• Provisions shifting certain arbitration fees from the consumer to the business.

Your Signature Is Not Necessarily Required

Federal law requires that arbitration agreements be in writing, but it does not necessarily require that the arbitration agreement be signed.  For example, under the terms of a contract, the consumer may signal that they agree to the contract's terms by making use of the product or service, or by keeping a delivered product and not returning it within a certain period of time.

Opt-Out Provisions

Many arbitration agreements permit the consumer to reject the arbitration portion of the contract while keeping the remainder of the contract in force.  The procedure for making this rejection will be contained in the contract.