What is an arbitration clause?


There are a number of standard clauses found in commercial contracts concluded between business entities. These clauses or group of clauses are known as ‘boilerplate’ clauses.

An example of such a boilerplate clause is an arbitration clause. An arbitration clause is inserted into a contract to ensure that if a dispute in relation to the contract arises, arbitration will be used to resolve the issue.

Call us if you would like an arbitration clause drafted into an agreement, or if you are in dispute over an existing arbitration clause, and we will recommend a specialist solicitor to assist you.

The use of arbitration clauses

An arbitration clause must be carefully drafted. It should clearly define what disputes should be resolved by arbitration. For example, you must consider:

  • Should arbitration be used to resolve all disputes that arise between parties
  • Should it be used to resolve just the ones arising out of that specific contract

An arbitration clause should designate a specific party to be the arbitrator. The arbitrator will be the person responsible for hearing the dispute and passing judgment. If you think the arbitrator may be biased, you should query this with the other party before signing the agreement.

However, if you have already signed the agreement you can still challenge the validity of the arbitration clause in court as long as you have solid grounds to do so. For example, if you are claiming that the arbitrator is biased, on what basis are you making this claim?

Why businesses use arbitration

Arbitration is used by many businesses as a way of approaching the settlement of disputes without needing to resort to court action. Such methods have developed in recent years, and are collectively referred to as alternative dispute resolution (ADR).

Arbitration is a form of ADR, used by those looking for a formal and decisive conclusion to a dispute. The main feature of arbitration is that all parties to a dispute must consent to its use. As a result, it can only benefit your business if the other party to the dispute is also receptive to arbitration.

For this reason, many commercial contracts and business transactions now specify the preferred method for the resolution of disputes relating to that agreement at the outset. Your commercial solicitor will be able to offer legal advice on the best way to incorporate an arbitration clause into the wording of your commercial contracts.

If you are considering entering into a commercial contract, consult your commercial solicitor for advice on drafting an arbitration clause. For more advice on using arbitration within the course of your business and why it's proving popular, see our information page on arbitration.

Are you in dispute over an arbitration clause or do you require an arbitration agreement or clause to be drafted for your business? Contact Law works with qualified public and international law experts who can help with any issues relating to the contract, and also arbitrators who can help with any dispute resolution that arises as a result of the arbitration clause or agreement. Please call us on 0800 1777 162 or complete the web-form above.

0800 1777 162
or fill in the form
Our trained advisor contacts you
Your chosen specialist solicitor calls you
Quick enquiry form
Area of law:
What our clients say about us
"This was the first time I've been to court, which was a nerve-racking experience for me. However, I felt very prepared, I understood my case and representation - this was down to you."
Gavin, criminal motoring, Oct 15
"Your service, and the prompt call back from your recommended firm was very good. I would not hesitate to call again or recommend your service."
Ian, employment law, Truro, July 15
"The firm were excellent, could not have been better! They are exactly what I need right now."
Linda, criminal defence, Thames Ditton, Jul 15
"Your contact and service was immediate and utmost professional, 10/10."
TF, conveyancing, Dudley, Jun 15
"I appreciate the service that you provide. I found you to be courteous, efficient and reassuring at a time when my confidence in justice is completely negative."
Patrick, litigation, Pontypridd, Jun 15
"I cannot tell you how much I appreciate the speed of which you came back to me in. If anyone else can benefit from your help like I have done, it would make my day."
Gail M, family law, Potters Bar, Jun 15
"Your assistance was extremely helpful. Particularly to someone who in 40 years of business has never experienced this sort of issue."
TD, commercial litigation, Galashiels, Apr 15
"It is difficult to express the value Contact Law has to someone like me who had very little understanding of the law and how to proceed forward with my case. Thank you for the service you provided."
AE, defamation law, Worthing, Apr 15
"Thank you for the efficient service I received. I was contacted by your solicitor on the same day as my request. Your quick response to my situation made me feel secure."
AN, employment law, London, Apr 15
"Your service was excellent, very fast and informative. I never got the impression of being pressurised at all. The solicitor you recommended was also excellent – very knowledgeable and supportive."
JHD, Motoring law, Liverpool, Apr 15
Contact Law supports the endeavours of STAE and commends all the work they are undertaking to assist in the plight of the Asian Elephant


We use cookies on the Contact Law site to help us improve it.

If you would like to allow our cookies, please click 'Continue' or carry on browsing. For more information on cookies and how to change your settings, click 'More info'.