Legal Definitions - arbitration act

An arbitration act is a law, enacted by either a federal or state government, that establishes the legal framework and procedures for resolving disputes through arbitration. These acts ensure that agreements to arbitrate are legally enforceable and provide guidelines for how arbitration proceedings should be conducted, including aspects like arbitrator selection, hearing procedures, and the enforceability of arbitration awards.

Here are a few examples to illustrate how an arbitration act applies:

• Commercial Contract Dispute: Imagine a large construction company based in Texas enters into a contract with a materials supplier from Oklahoma. Their contract includes a clause stating that any disagreements will be settled through binding arbitration. When a dispute arises over the quality and delivery schedule of materials, the Texas company wants to initiate arbitration.

  How it illustrates the term: The Federal Arbitration Act (FAA), a federal statute, would govern the enforceability of that arbitration clause. It ensures that both parties are legally bound to proceed with arbitration rather than immediately filing a lawsuit in court, providing the legal authority for courts to compel arbitration if one party tries to avoid it.

• Employment Agreement Dispute: Consider an employee in Florida who signs an employment agreement that contains a mandatory arbitration clause for all workplace disputes, including claims of discrimination. If the employee later believes they were discriminated against and wants to pursue a claim, they must go through arbitration as per the agreement.

  How it illustrates the term: The Florida Arbitration Code, a state statute, would provide the specific rules and procedures for conducting this arbitration within Florida. It outlines how arbitrators are selected, the scope of discovery, and how an arbitration award can be confirmed or challenged in a state court, ensuring the process is fair and legally recognized.

• Consumer Service Agreement: A customer in California signs up for internet service, and the terms of service include a provision requiring arbitration for any disputes related to billing or service quality. When the customer has a persistent issue with their internet speed and feels they are being overcharged, they decide to pursue a resolution.

  How it illustrates the term: The California Arbitration Act, a state statute, would dictate the legal framework for this consumer dispute. It would confirm the enforceability of the arbitration clause in the service agreement and provide guidelines for the arbitration process, such as requirements for arbitrator neutrality and the ability for either party to seek judicial review of the arbitration award under specific circumstances.