Alternative Dispute Resolution (ADR) Sample Clauses for Commercial Contracts

Below are two suggested (short and long-form) Alternative Dispute Resolution (ADR) Sample Clauses for Commercial Contracts. For use of the Ejudicate arbitration clause, you will need to choose the language that best suits your needs for your agreement or agreements and their subject matter.   

As a friendly reminder, Ejudicate cannot provide legal advice, and the use of this clause should be reviewed and approved by your attorney or legal advisor.

Short Form Ejudicate Arbitration Clause

Any controversy or claim arising out of or relating to this Agreement, or the breach thereof (including any monetary disputes or declaratory relief actions) will be settled by arbitration administered by Ejudicate, Inc. (d/b/a ejudicate.com) in accordance with Ejudicate’s then published rules, E-Judge selection procedures, discovery restrictions, document and evidentiary review, and live-hearing conditions found at www.ejudicate.com. The parties to this Agreement agree that hearings and live testimony are limited and will be initiated solely at the discretion of the Arbitrator and that the Arbitrator may, at his or her sole discretion, make a ruling based solely on the evidence, documents and written testimony submitted by the parties.

The Ejudicate, Inc. arbitrator’s decision is final and binding on the parties and judgment may be entered thereon. Judgment on the award rendered by the arbitrator may be entered in any court that has proper jurisdiction. In the event a party fails to proceed with arbitration, unsuccessfully challenges the arbitrator’s award, or fails to comply with arbitrator’s award, the other party is entitled to costs of suit including reasonable attorney fees and costs for having to compel arbitration or defend or enforce the award.

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Unless otherwise stated or expressed in this Agreement, the parties agree that Ejudicate will apply California law to this dispute and its adjudication.

Long-Form Ejudicate Arbitration Clause

A. [1]To the extent that a claim or dispute arises out of, or in relation to this Agreement including without limitation, the terms, construction, interpretation, performance, termination, breach, or enforceability, including the determination of the scope or applicability of this agreement to arbitrate (a “Claim”), the Parties agree that the Claim shall be, at the election of either Party, resolved by binding arbitration in [________] [2] using Ejudicate, Inc. as the arbitrator.

B. The [3]Parties acknowledge that this Agreement evidences a transaction involving interstate commerce. Notwithstanding the choice of law provision found in “E” in this section of the Agreement,[4] with respect to applicable substantive law, any arbitration conducted pursuant to the terms of this Agreement shall be governed by the Federal Arbitration Act (9 U.S.C. §§ 1-16).

C. Nothing in the preceding paragraph, or otherwise, nor the commencement or pendency of any proceeding, shall limit the right of any Party to this agreement to exercise any self-help rights or any other rights or remedies available to it by contract or applicable statutory or case law (including but not limited to the filing of an involuntary petition in bankruptcy, the right of set-off, attachment, recoupment, foreclosure, or repossession) with respect to the extension of credit, the protection and preservation of [5]Collateral, the liquidation and realization of Collateral, the protection, continuation and preservation of lien rights and lien priorities, the collection of indebtedness, and the processing and payment or return of checks, whether such occurs before, during or after the pendency of any arbitration proceeding. The institution and maintenance of an action for judicial relief or pursuit of provisional or ancillary rights or remedies or exercise of self-help remedies, all as provided herein, and the pursuit of any such rights or remedies, shall not constitute a waiver of the right or obligation of any Party, including the plaintiff seeking judicial relief or remedies, to submit a Claim to arbitration, including Claim that may arise from the exercise of such rights.

D. A Party electing to resolve a Claim by binding arbitration shall submit a demand for arbitration to the other Party, as set forth herein, within the time limit established by the applicable statute of limitations for the asserted Claims or within one year of the date the submitting Party first knows or should have known of the event giving rise to the Claims if no statute of limitations is applicable. The demand shall identify and describe the nature of all Claims asserted and the facts upon which such Claims are based.

E. The arbitration shall be administered by Ejudicate, Inc. (www.ejudicate.com) and the arbitration shall be conducted in accordance with the terms of this Section __[6] and the Ejudicate, Inc. Rules as published on their website at https://www.ejudicate.com/arbitration-rules/ (the “Ejudicate Rules”) (as may be amended or replaced from time to time). The arbitrator shall be chosen in accordance with the procedures of Ejudicate, Inc.with the arbitrator chosen must be an attorney with 10 years of active practice concentrating on commercial finance transactions. The arbitrator shall base the award on applicable law of the Chosen State of ________________________[7]. (without reference to conflict of law principles). The arbitration shall be conducted by a single arbitrator and in English. The parties to this Agreement agree that hearings and live testimony are limited and will be initiated solely at the discretion of the Arbitrator and that the Arbitrator may, at his or her sole discretion, make a ruling based solely on the evidence, documents and written testimony submitted by the parties.

F. The costs of the arbitration shall be paid in accordance with the Ejudicate, Inc. Rules. The arbitrator shall award attorneys’ fees and expenses to the Party which is required to receive payment from the other Party pursuant to the award resulting from this arbitration. It shall be presumed (subject to rebuttal only by the introduction of competent evidence to the contrary) that the amount recoverable is the amount billed to the prevailing Party by its counsel and that such amount will be reasonable if based on the billing rates charged to the prevailing Party by its counsel in similar matters.

G. Unless contrary to law, the arbitration proceedings and the arbitration award shall be maintained by the Parties as strictly confidential, except as is otherwise required by court order or as is necessary to confirm, vacate or enforce the aware and for disclosure in confidence to the Parties’ respective attorneys, tax advisors and senior management. The arbitrator to whom a Claim has been submitted hereunder shall retain jurisdiction to enforce this Section after entry of a judgment in any court having jurisdiction on the award issued by such arbitrator.

H. EACH PARTY WAIVES THE RIGHT TO LITIGATE IN COURT OR AN ARBITRATION PROCEEDING ANY DISPUTE AS A CLASS ACTION, EITHER AS A MEMBER OF A CLASS OR AS A REPRESENTATIVE, OR TO ACT AS A PRIVATE ATTORNEY GENERAL.

[1] If this document is changed, be sure to make a change in forms/lenders funding/participations/template.

[2] Location of arbitration.

[3] Make sure the document has “Party” as a defined term.

[4] Choice of law provision.

[5] Make sure “Collateral” is a defined term in the agreement.

[6] Section number of this arbitration provision in the agreement.

[7] State Law chosen to govern this Agreement.