Arbitration

Your freelance contract with a tech company includes a mandatory arbitration clause. When they refuse to pay your final $12,000 invoice, you can't sue them in court. Instead, you file with the American Arbitration Association (AAA), pay the filing fee (around $200-$300 for claims under $75,000), and an arbitrator decides the case, usually within 3-6 months, compared to 1-2 years in court. Arbitration clauses typically specify the administering body (AAA, JAMS, or ICC for international disputes), the location, and whether the proceedings are confidential. Some clauses limit discovery, which can be an advantage or disadvantage depending on which side you're on. A well-drafted clause also addresses who pays the arbitrator's fees, splitting costs or having the losing party pay.

Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The arbitration shall take place in [City, State], and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.