What does your arbitration provision mean?

Just because you have a contract doesn’t mean you can’t be sued – you can, but this provision gives you legal protection by specifying that you will solve your case in arbitration rather than at a trial. And this provision discusses what happens if there is a controversy or a claim that arises out of or relating to this contract that will go to arbitration. Arbitration is much cheaper than going to court, and you can put in there that either party may refuse to arbitrate if the dispute is for a sum less than $___. And this sum is up to you and what you would consider actually going into arbitration for. (For example, you’re probably not going to go to arbitration for $20, because it’s not really worth your time.)

This provision also states that the arbitration amount will not exceed the contracted price of the controversy in dispute. So if your contracted fee is $700, the arbitration amount can’t exceed $700.

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