Arbitration clauses for Contractors may not sound like a match made in heaven, but the truth is that these contract agreements make life much easier in the event of disputes.
Contracting is a trade fraught with difficulties when it comes to disputes arising during handover to your client. As a Contractor, you will know that even the best-drawn plans end up needing tweaks or modifications.
Cable rough-ins might not go to plan, the plumbing might prevent you from installing a counter exactly to the inch, or someone may have ordered the wrong type of finishing panels.
Going to court over such matters is costly, time-consuming and prevents you from taking on more jobs or being in the field with your team.
But there is a system that can help you. Online arbitration with market leading service provider Brief can help you avoid sticky situations such as the ones mentioned above.
Arbitration clauses are protected by the Federal Arbitration Act and the US Supreme court has decided as such in the Imburgia case.
You can include an arbitration clause in your contracts to take any disputes over shopfitting to arbitration with peace of mind that arbitration agreements are legally recognised and are far cheaper and faster to conclude than the civil court or traditional face to face arbitration.
The average time to turn around an arbitration claim with Brief is 45 days.
In addition, you pay an upfront fee which is dependent on case complexity and should cost you an average of $1,700 or less.
Include an online arbitration clause in all your contracts
The courts recognise that they simply cannot keep up with the volume of cases that are filed on a daily basis.
As part of a strategy to bring that caseload down, more state courts are advocating the use of arbitration.
In fact, arbitration is becoming more common and is endorsed by the vast majority of state legal departments.
As an example, the US Department Of Transportation stipulates that by Federal Law, every moving company must be signed up to an arbitration program if they are involved in interstate shipments of household goods.
The DOT instituted this law (49 CFR 375.211) to reduce pressure on the US civil court system.
We expect more governmental departments and private companies to demand online dispute resolution solutions in the post-Covid world.
Arbitration clauses for contractors are also a great way to ensure that you are paid for your work.
Contractors are typically very busy tradespeople and many often find that they end up chasing their own tails when chasing up amounts of money that are owed.
As with any other trade, ensuring a constant healthy cash flow and protecting accounts receivable are of paramount importance to running a successful business.
But chasing up money that is owed to you can be time-consuming, and difficult and keep you away from taking on new jobs.
All contractors have been there at some point. It’s a quiet month and you don’t have as much work as you would like in the pipeline.
You start sending out email reminders to clients that have not paid you, even though they are overdue payment terms.
You know that the longer you let it go, the less likely they are to cough up what they owe you.
What are your options?
If your clients do not pay you, what can you actually do to get access to justice? There are some options, but they normally give a return of pennies to the dollar and could even end up costing you more than you are actually owed.
Debt collection agencies
The debt collection agency business model is aimed at making money off your debt. They call and chase debtors, but they will charge you money for a simple phone call, even if the debtor doesn’t answer.
Before you know it, you could end up owing these guys more than you are owed, so tread carefully.
Legal letters
You could send your clients a legal letter.
Aside from burning bridges and not getting their business again, you need to find a lawyer, pay the lawyer’s fee, send the letter in the registered post and wait for a reply.
You get it… it will cost you an arm and a leg and will probably get you nowhere far very quickly.
Sue them in the civil court
The next alternative is to file a civil lawsuit against your clients. But be warned… the Civil Court delays before Covid were already huge. Post-Covid, the Civil Courts backlog has grown to gigantic proportions with no end in sight.
If you do ever get to have your day in court, it is going to take years to get there.
Once the case does get to court, you will be paying in blood, sweat and tears as lawyers go on fishing expeditions and the defendants do not show up in court. What does that mean? Throwing away good money after bad.
But there is a legal process that favors you.
Include an online arbitration clause in all your contracts
Arbitration clauses for contractors are a real alternative to traditional litigation.
The courts recognise that they cannot keep up with the volume of cases that are filed on a daily basis.
As part of a strategy to bring that caseload down, more state courts are advocating arbitration.
In fact, arbitration is becoming more common and is endorsed by the vast majority of state legal departments.
As an example, the US Department Of Transportation stipulates that by Federal Law, every moving company must be signed up to an arbitration program if they are involved in interstate shipments of household goods.
The DOT instituted this law (49 CFR 375.211) to reduce pressure on the US civil court system.
We expect more governmental departments and private companies to demand online dispute resolution solutions in the post-Covid world.
So what is an arbitration clause and how can it help contractors?
Arbitration clauses for contractors are an exciting new option to protect your contracts and reclaim debts.
Online arbitration is a form of online dispute resolution and alternative dispute resolution.
A total of nearly 10,000 arbitration cases were filed in the US in 2020, with $18,011,977,599 in claims arbitrated.
Binding arbitration depends on a solid contract that is relevant and fit for purpose. This means that the solution must fit the contract itself. Many contracts call for expensive, in-person arbitration, which is overkill for most monetary claims.
Put simply, when entering a contract, an arbitration clause will stipulate that in case of default or disagreement, an arbitration platform that you both agree on can be used to trigger a process that is legally binding.
If both parties agree to arbitrate in the contract itself, then the pathway to resolution can be made simple, fast and effective.
What makes Brief a market leader in the field is that its process is 100 percent online.
Filing an arbitration claim with Brief is easy and covers all types of disputes. The average time to turn around an arbitration claim with Brief is 45 days.
In addition, you pay an upfront fee which is dependent on case complexity and starts at $600.
You can check out Brief’s arbitration sample clause and clause builder.
The Brief six-step process involves opening a claim, to which the defendant will be notified.
They will be given the opportunity to respond to the claim, but if they don’t the assigned Ejudge will decide that they have defaulted and an arbitration award will be issued, which can be filed in the local court and reduced to an enforceable judgment.
Once both parties submit their evidence, the Ejudge will proceed to evaluate the evidence and will also handle the Discovery phase, eliminating “fishing expeditions” that can take place in both civil lawsuits as well as traditional arbitration.
Should you prevail, the Ejudge will issue an Award in your favor.
Brief’s main focus is on bringing the debtor to the table. This is why we also offer them the ability to settle the claim.
As the plaintiff, your business will be given the opportunity to set out a settlement sum, which is presented to the defendant.
If they do not find the offer acceptable, they are invited to make a counteroffer which you can accept or dismiss in favor of the arbitration process running its natural course.
Are you ready to recover what you are owed?
As you can see, arbitration clauses for contractors can help avoid the pitfalls of traditional litigation.
Brief has helped small and large businesses across the United States recover debts that were simply not worth the cost of traditional litigation or arbitration if not for online dispute resolution.
Register now on our online portal. If a dispute arises, it is a simple process to submit your claim, all for a flat upfront fee.
Brief’s online arbitration platform is typically 80 percent faster (or more) than a civil court hearing or traditional “brick and mortar” arbitration.
Satisfied and repeat participants include electronic commerce sites (Fintech), factors, banks, MCAs, and other lenders.
Brief also handles all types of monetary disputes as well as declaratory relief actions such as quiet title, coverage claims and warranty claims.
Our screened network of “Ejudges” spreads across all 50 states and each case is matched to the jurisdiction and subject matter expertise of the Ejudge.
You can request a demo from our homepage or call one of our arbitration consultants today on tel: +12134443794 . Alternatively, drop us an email at [email protected] to book an obligation-free consultation.
Brief is a market-leading online arbitration platform in the United States. Our 100 percent online alternative dispute resolution platform helps businesses protect their contracts and agreements through online arbitration. Follow us on LinkedIn or Facebook for updates and news about online arbitration and more.
*Brief cannot and will not give legal advice on any matters, financial or not.
