What is an arbitration agreement?

An arbitration agreement is a clause in a contract that requires the parties involved to resolve any potential disputes through an arbitration process. This is typically a clause in a broader contract. It just says that any disputes should be settled outside of court.

Arbitration agreements are included to keep disputes confidential and to limit litigation costs should an issue arise. When you are signing an arbitration agreement, you are limiting your rights, so it is important to understand and agree with the agreement before you take any legally binding action, such as signing the agreement.