The Unilateral Arbitration Clause is designed for use in situations where one party wishes to maintain flexibility in dispute resolution while requiring the other party to proceed through arbitration. Common in U.S. commercial relationships, particularly in business-to-consumer and employer-employee contexts, this clause must comply with the Federal Arbitration Act and applicable state laws. The clause typically specifies the scope of arbitrable disputes, arbitration procedures, and the process for selecting arbitrators.
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1. Parties: Identification of contracting parties and their legal capacity
2. Background: Context and purpose of the arbitration agreement
3. Definitions: Key terms used throughout the agreement including 'Arbitration', 'Dispute', 'Award'
4. Scope of Arbitration: Detailed description of disputes covered by the arbitration clause and the unilateral nature of the obligation
5. Arbitration Procedures: Process for initiating and conducting arbitration, including notice requirements and timelines
6. Choice of Arbitrator: Process for selecting arbitrator(s) and required qualifications
7. Governing Law: Specification of U.S. law application and jurisdiction
8. Severability: Provision ensuring that if any part of the agreement is found invalid, the rest remains enforceable
1. Class Action Waiver: Optional provision waiving right to participate in class actions, recommended for consumer or employment contracts
2. Cost Allocation: Optional section specifying how arbitration costs will be shared between parties
3. Confidentiality: Optional provisions regarding confidentiality of arbitration proceedings and outcomes
4. Discovery Procedures: Optional detailed provisions regarding the scope and process of discovery in arbitration
1. Schedule A - Arbitration Rules: Detailed procedures and rules governing the arbitration process
2. Schedule B - Fee Schedule: Detailed breakdown of arbitration costs, fees, and payment responsibilities
3. Schedule C - Arbitrator Selection Process: Step-by-step process for arbitrator selection and replacement procedures
4. Appendix 1 - Notice Forms: Standard forms for initiating arbitration and other required notices
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