Arbitration Clause
A contract provision requiring disputes to be resolved by a private arbitrator rather than litigated in court, often including waiver of jury trial and class-action rights.
What it means
Arbitration clauses require parties to submit disputes to one or more private arbitrators whose decisions are binding and reviewable only on narrow grounds. The Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) makes most arbitration clauses enforceable in commercial contracts. Consumer and employment arbitration clauses are subject to additional state-law restrictions (unconscionability) and federal carve-outs (e.g., the EFAA for sexual-harassment claims, 2022).
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