Mediation and Arbitration Agreement Template

In plain language: Identifies the full legal names of all parties to the agreement and summarizes the underlying relationship or contract that may give rise to disputes.

Common mistake: Using trade names instead of registered legal entity names — if enforcement becomes necessary, misidentified parties create grounds to challenge the award.

In plain language: Defines which claims, controversies, and disputes are subject to the mediation and arbitration process — typically drafted broadly to cover all claims arising out of or relating to the parties' relationship.

Common mistake: Drafting the scope too narrowly, so that tort claims or statutory claims fall outside it — courts then split proceedings between arbitration and litigation, multiplying cost and delay.

In plain language: Requires the parties to attempt good-faith mediation with a neutral mediator before initiating arbitration, with a defined timeline and mediator-selection process.

Common mistake: Setting no deadline for the mediation step — without a time limit, one party can stall the mediation process indefinitely to delay binding arbitration.

In plain language: Specifies the arbitral institution, the procedural rules that will govern the proceedings, and the seat and language of arbitration.

Common mistake: Failing to specify the governing rules and institution — leaving the procedure undefined forces parties to negotiate process under pressure, or invites a court to determine it.

In plain language: Sets out how the arbitrator or panel is chosen — number of arbitrators, qualification requirements, selection method, and challenge procedure.

Common mistake: Requiring unanimous agreement on the arbitrator with no fallback mechanism — when parties cannot agree, the entire process stalls and requires court intervention to appoint.

In plain language: Obligates all parties, counsel, witnesses, and the arbitrator to keep the existence, proceedings, evidence, and outcome of the dispute confidential.

Common mistake: No confidentiality clause at all — without it, either party can publicize the proceedings or the award, eliminating one of the key advantages of private dispute resolution.

In plain language: Addresses who pays the arbitral institution's administrative fees, the arbitrator's compensation, and each party's own legal fees — either following the default rules of the institution or a customized allocation.

Common mistake: Requiring the claimant to pay all upfront fees without a cost-sharing or income-based waiver — courts have voided arbitration clauses that make the process prohibitively expensive for one party to pursue.

In plain language: Each party waives the right to bring or participate in class, collective, or representative proceedings and agrees to resolve disputes only on an individual basis.

Common mistake: Using a class waiver in an employment or consumer context without checking jurisdiction-specific enforceability — California courts and the NLRA impose significant restrictions on class waivers in employment agreements.

In plain language: Confirms that the arbitrator's decision is final and binding, may be entered as a judgment in any court of competent jurisdiction, and is subject to only limited grounds of appeal.

Common mistake: Adding a broad right to appeal the award in court — this effectively converts arbitration back into litigation and eliminates finality, the agreement's central value.

In plain language: Specifies which jurisdiction's substantive law applies to the merits of disputes and confirms that if any provision is unenforceable, the rest of the agreement remains in effect.

Common mistake: Choosing a governing law with no connection to where either party operates or the relationship was formed — courts in the actual jurisdiction may refuse to enforce foreign-law choices on public-policy grounds.

A mediation and arbitration agreement is a contract in which two or more parties agree to resolve disputes through a two-step private process — first attempting facilitated mediation, then submitting unresolved claims to binding arbitration — rather than filing a lawsuit in court. It is typically signed at the start of a business relationship and applies to all disputes arising from that relationship.

Mediation is a facilitated negotiation where a neutral third party helps the parties reach a voluntary settlement — the mediator has no power to impose a result. Arbitration is a private adjudication in which a neutral arbitrator hears evidence and issues a binding final decision, similar to a judge but outside the court system. Most combined agreements require mediation first; if it fails, arbitration follows as the binding final step.

Yes, a properly executed mediation and arbitration agreement is generally enforceable as a contract in most jurisdictions. In the United States, the Federal Arbitration Act strongly favors enforcement of written arbitration agreements. Courts will typically compel arbitration if a valid agreement exists and the dispute falls within its scope. Certain provisions — such as class waivers in employment contexts — may be unenforceable in specific jurisdictions, so consider legal review for sensitive applications.

Yes. If a valid mediation and arbitration agreement covers the dispute and one party files a lawsuit instead, the other party can file a motion to compel arbitration. Courts in jurisdictions governed by the Federal Arbitration Act (US) or the New York Convention (international) will generally grant that motion and stay or dismiss the court proceedings. This is one of the agreement's primary functions — it removes disputes from the public court system.

Most commercial disputes can be covered: contract breaches, payment disputes, IP ownership claims, service quality disagreements, partnership conflicts, and employment disputes. Certain claims may be excluded by law or public policy — for example, some jurisdictions prohibit arbitrating sexual harassment claims under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (US, 2022). Criminal matters cannot be arbitrated. Define scope broadly but review jurisdiction-specific exclusions.

For domestic US commercial disputes, AAA (American Arbitration Association) and JAMS are both widely recognized and routinely enforced. AAA is generally less expensive for smaller disputes; JAMS is preferred for high-value or complex commercial matters. ICC (International Chamber of Commerce) is the standard choice for cross-border commercial relationships. Name the institution and cite its specific ruleset in the agreement — an unnamed institution forces parties to negotiate procedure after a dispute arises.

Yes. A mediation and arbitration agreement is a bilateral contract and requires signatures from all parties to be enforceable. In employment contexts, some jurisdictions also require the employer to provide the employee with a reasonable opportunity to review the agreement before signing. Using a timestamped eSign platform creates an auditable record of when each party signed, which is important if enforceability is later challenged.

Yes, typically as a signed addendum or amendment that is incorporated by reference into the original agreement. In common-law jurisdictions, amending an existing contract requires fresh consideration — something of value exchanged by both parties — to be enforceable. Adding the addendum at the time of a contract renewal, pay increase, or new scope of work satisfies this requirement in most cases.

If a court finds an arbitration clause unenforceable — due to unconscionability, lack of consideration, or a statutory prohibition — the dispute reverts to court. A well-drafted severability clause limits the damage: it ensures that only the invalid provision is struck, not the entire agreement. Some agreements also include a fallback provision specifying that if arbitration is unavailable, disputes will be heard in a designated court in the governing jurisdiction.